Opening the mail is rarely an exciting task but receiving the dreaded IRS certified mail can send even the calmest person into a frenzy. You may be asking yourself, why would the IRS send me a letter? People start mentally combing through their financial transactions trying to figure out what might be wrong. Others may head straight to the web to see if they might be receiving an IRS audit letter.
In reality, however, the IRS sends certified letters for many reasons. That letter could be an audit letter, but it could also be a letter requesting identity verification before the IRS issues a tax refund. Check out these common reasons to receive certified mail from the IRS.
what is irs certified mail?
The IRS relies on the United States Postal Service to deliver mail to millions of Americans. Unfortunately, mail is not always delivered and is sometimes particularly important and urgent. If the issues are not addressed, the IRS will resort to sending certified letters.
your certified mail has these specific characteristics:
- mailing receipt: certified mail comes with a mailing receipt for the sender, in this case, the irs. this shipping receipt is the first step in a tracking system that ensures delivery to the intended recipient.
- Signature Requirement: You don’t leave a certified letter in someone’s mailbox . requires a signature as a record of delivery and will be returned if not accepted by the intended recipient.
- electronic delivery: The final component of your certified mail is electronic delivery tracking. the shipper can review the delivery information online or by phone.
what does it mean to receive a certified letter from the irs? certified letters are generally a last resort for the irs. That means once someone starts receiving your certified mail, they’ll be expecting a response within a reasonable amount of time. failure to respond could have serious consequences.
7 Valid Types of Certified Mail and IRS Notices
There are many reasons the IRS might contact someone, but the most common reasons are related to outstanding balances and requests for more information. however, there are some valid reasons someone might receive your certified mail.
1. outstanding balance
An unpaid tax balance is one of the common reasons the IRS sends certified mail. The IRS sends standard mail when the collection process begins, but the process will escalate if the notices are ignored. The demand letter will include information on how to settle the taxes owed with options such as an offer in compromise or an installment agreement.
It is important to contact the IRS immediately after receiving certified letters with a demand for payment. this balance continues to accrue interest and penalties and will ultimately lead to a notice of federal tax lien, wage garnishment, bank lien, or some other type of forced collection action.
2. refund discrepancy
not all irs news is bad news. Individuals and businesses expecting a tax refund can receive IRS certified mail if there is a discrepancy on the return. this discrepancy could be a lower or higher refund than anticipated, though it’s important to compare any new refund amount to the original tax return.
Even if a certified letter informs someone of a reimbursement discrepancy, it is important to read the entire notice for pertinent information. additional steps may need to be taken to ensure the refund is processed.
3. return questions
From time to time the IRS has questions about a tax return. If the questions are not urgent or critical to processing a return, the IRS will send the request for information by standard mail. however, the most critical requests will be sent as certified letters. the irs will usually include any forms that need to be completed as well.
Common questions about tax returns include clarification of income sources, mailing address discrepancies on file, and verification of tax credits and deductions. delays in answering these questions will delay the refund process.
4. identity verification
The IRS takes identity protection very seriously and will send certified letters when they need to verify someone’s information. This letter will include instructions on how to complete the identity verification process and will require valid forms of identification such as credit card or student loan account numbers.
There are also other requirements to verify identity, such as a mobile phone number, income tax returns, filing status, and a 5071c, 5747c, or 5447c letter. this process is often urgent and could delay refunds if not completed quickly.
5. necessary information
sometimes the irs needs more information to process a tax return. There could be missing information from the W-2 form or a discrepancy in the employer information the IRS has on file. If the information is critical, the IRS will include instructions to easily return the requested information. this can be over the phone or through an online portal.
In some cases, taxpayers may receive an audit letter from the IRS. This certified letter will include instructions for returning supporting documents and updating any other information. it will also have a deadline, so pay close attention to the dates.
6. return amendments
Although not a formal audit, the IRS occasionally needs to make changes to a filed tax return. In these cases, the IRS will send a CP2000 letter. this letter will describe the changes and include instructions for accepting or disputing the revisions. supporting documentation may be required for anyone who does not agree to the changes.
These changes to a tax return are usually urgent, but do not require an amended return. The changes are critical to processing the return, so any delay in responding to the notice could further delay your tax refund.
7. processing delays
Processing delays are another reason the IRS sends certified mail. While they don’t send general late notices that affect everyone, they do send certified letters to people who expect a tax refund but may owe other federal taxes. this notice is called a cp44 notice and unfortunately it does not come with instructions.
irs certified mail to process delays like this is a courtesy notice. Detailed information will follow once the IRS has determined whether the refund will be applied to a back tax balance or sent to the recipient.
practical tips for handling irs certified mail
It can be intimidating to receive irs certified mail. It’s not uncommon for people to put the letter aside without reading it so they can deal with the problem later. this can lead to anxiety about the content of the letter.
Instead of letting your anxiety build, follow these tips for dealing with your prompts:
- Please read the entire letter carefully: IRS letters include the type and reason for the notice, detailed instructions on next steps, and the most appropriate method of contact.
- Please note important deadlines: If the IRS wants completed forms or supporting documentation, the certified letter will have a deadline and instructions for returning the information.
- contact to avoid collections: people with outstanding tax balances should contact the irs to avoid collection activities such as additional letters and phone calls.
- hire a specialist Certified Tax Resolution : Some people owe taxes that are almost unmanageable without the professional help of certified tax experts.
the most important tip for handling irs certified mail is simply not to ignore it. ignoring certified notices can result in federal and state liens, as well as the potential for wage garnishments.
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Pending taxes can have significant financial consequences, including the possibility of tax liens and liens. Individuals and families receiving IRS Certified Mail for their tax obligations should contact a licensed tax professional with IRS experience.
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