Every year the IRS mails thousands of letters to clergy for many reasons. Here are some tips and suggestions:
Don’t ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do.
Don’t panic. The IRS and its authorized private collection agencies do send letters by mail. You need to read the letter carefully and take the appropriate action.
Do take timely action. A notice may reference changes to your account, taxes owed, a payment request or a specific issue on a tax return. Taking action timely could minimize additional interest and penalty charges.
Do review the information. If a letter is about a changed or corrected tax return, you should review the information and compare it with the original return. If you agree, you should make notes about the corrections on your personal copy of the tax return, and keep it for their records.
Don’t reply unless instructed to do so. There is usually no need for you to reply to a notice unless specifically instructed to do so. On the other hand, clergy who owe should reply with a payment. IRS.gov has information about payment options.
Do respond to a disputed notice. If you do not agree with the IRS, you should mail a letter explaining why you dispute the notice. You should mail it to the address on the contact stub at the bottom of the notice. You should include information and documents for the IRS to review when considering the dispute. You should allow at least 30-60 days for the IRS to respond.
Do remember that there is usually no need to call the IRS. If you must contact the IRS by phone, you should use the number in the upper right-hand corner of the notice. You should have a copy of the tax return and letter when calling.
Do avoid scams. The IRS will never initiate contact using social media or text message. The first contact from the IRS usually comes in the mail.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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