Carl
Level 15

Investors & landlords

I have peace of mind

So many folks have a bit of a misconception about the IRS - though if one doesn't follow instructions that misconception may come true.

When the IRS finds a problem with a tax return they do not automatically assume you are a criminal. It's understood that people make mistakes. So a letter is sent to the tax payer detailing the problem or what the IRS changed on a tax return. Most of the time the IRS letter will say "we already changed it" along with additional refund you may be due, or a bill for additional tax you may owe.

That letter will then outline what actions to take if you disagree with changes made by the IRS and usually provides a deadline by which to respond. If you don't respond by the deadline then as far as the IRS is concerned, you agree with their changes to your tax return and there is *no* recourse after that deadline. This is one reason to keep your mailing address current with the IRS.

If taxes are due, then interest continues to accumulate. Depending on the amount of taxes due the IRS can (and usually will in time) take further action such as pay garnishment, or levying liens on property you own to satisfy the tax debt. Things will only get worse from there.

But a vast majority will work things out with the IRS in an amicable way for the most part. Yet it is true that when it comes to it, the IRS can be worse than the 1930's German Gestapo could ever dream off.