IRS and State Notices: Don't Ignore Them

Receiving a notice from the IRS or your state taxing authority can be stressful, but it's important not to panic—and most importantly, don't ignore it. If you receive any tax-related notice, always send a copy directly to your accountant at White Rabbit Financial as soon as you receive it.

Many notices simply request information or notify you of an issue that can often be resolved quickly if addressed promptly.

Waiting too long to respond can lead to additional penalties, interest charges, or missed deadlines.

Common IRS Notices

Some of the most common IRS notices we see include:

• Failure to File Penalties – If a tax return is filed late or not filed at all, the IRS may assess penalties and interest. In many cases, we can help determine whether the penalty is accurate and whether penalty relief or abatement may be available.

• Missing Documents or Information Requests – The IRS may send notices requesting additional documents or clarification regarding items reported on your tax return. Responding correctly and on time is essential to avoid delays or further action.

• Balance Due Notices – You may receive a notice indicating taxes, penalties, or interest are owed. Before making a payment, allow your accountant to review the notice to ensure the amount is correct and discuss any available payment options.

• Identity Verification Notices – Occasionally, the IRS will request that a taxpayer verify their identity before processing a return or issuing a refund.

State Notices and Annual Reports

State agencies also send a variety of notices related to taxes, business registrations, and annual filing requirements. Some common examples include:

• Annual report filing reminders for your business.

• State tax balance due notices.

• Sales tax or payroll tax correspondence.

• Requests for additional information or documentation.

Unfortunately, many businesses receive mail that looks official but is actually a solicitation or scam. Companies often send letters offering to file annual reports or business documents for excessive fees. While these notices may appear legitimate, they are not always from your state's official agency.

Before paying any invoice or filing any paperwork, send the notice to WRF so we can confirm whether it is legitimate and determine whether any action is required.

When You Receive a Notice

If you receive a notice from the IRS or any state agency:

1. Do not ignore it.

2. Do not immediately pay or respond without reviewing it.

3. Send a copy of the entire notice to your accountant at White Rabbit Financial.

4. Be mindful of any response deadlines listed in the notice.

A quick review by your accountant can save you time, money, and unnecessary stress.