Letter from IRS or State
Receiving a letter from the IRS or your state tax authority can be due to several reasons
Mistakes on the Return
- Missing RSU/Stock Option Income: If you’ve failed for RSU or stock option income on your return, you might receive a CP2000 or similar notice. This is one of the most common notices and often indicates that income was omitted.
- Missing 1099-K or 1099-MISC: If you operate an online business or make sales on platforms like eBay or Etsy but didn’t report the income, you might get a notice. The IRS and state authorities are unaware of your business’s profitability; you must file a Schedule C and report all income and expenses. Failure to do so can result in a notice requiring an amended return.
- Rollover or Withdrawal from a 401(k) or IRA: 1099-R forms are frequently missed, as are other forms like K-1s or 1099-DIVs.
- Other Reasons: Various other issues might lead to receiving a letter, such as discrepancies or additional information needed.
Failure to File a Return
The IRS and state authorities send letters when they believe you should have filed a return, including for businesses. Business owners may be surprised to learn that even inactive businesses often need to file returns. Penalties can be assessed for late filing of these zero-activity returns. Contact us to resolve these issues.
Audit/Request for More Information
The IRS may audit taxpayers, especially those with aggressive deductions or those running Schedule C businesses (freelancers, sole proprietors, single-member LLCs, etc.). You may be asked to provide receipts or other documentation to substantiate expenses. Reach out for representation support if you’re facing an audit or request for additional information.
