IRS Notices and Letters: Understanding Your Role
Creation of Some Notices and Letters
IRS uses the term “standard paragraphs” to create notices and letters sent to taxpayers. Basically, someone sits down at a computer and pulls together a group of written “standards” that have been approved. The paragraphs when combined create the letter or notice. Sometimes a paragraph is forgotten and does not provide the taxpayer with the information needed to respond. Other times a paragraph has been added that does not make any sense.
Letter 12 C has been recently used for identity theft and now for inquiries concerning Form 1040 and the lack of Form 8962 attached to the return. Other identity theft letters include Letter 5071C and Letter 4883C.
IRS has over the last few years attempted to improve the standard paragraph notices and letters in an attempt to provide clearer guidance and to assist in the understanding of what information IRS needs. That has been successful in some aspects, but it still boils down to picking out the right paragraphs to coordinate with the information requested. In addition, some letters and notices are set in stone and change very little. But someone still has to pick the right date, or right year to place on the notice.
Internally IRS does have a system to identity systemic notice issues, like the one in late December 2015 and early January 2016 when the IP PIN notices were sent for the tax year 2014, when the actual date was for the 2015 year. There is a system in place, but once the notice is released, there is not much that can be done with the errors.
Dates on Notices
Many of you have noticed that the notices are sometimes dated quite far in advance of the date received. IRS will print a “run” of notices 2-3 weeks before they are to be mailed. Recently we had a string of notices concerning the retrieval of an IP PIN when the IP PIN system had been shut down weeks before. Preprinting of notices or letters is pretty standard, so do not be overly concerned with the dates in making the determination of whether the notice is a valid notice from IRS or a scam.
Notices and Scams
As identity theft grips the IRS, more and more of you are concerned about the validity of IRS notices or letters your clients receive. Recent notices have come out of Austin, Texas or Fresno, CA and have been valid. But notices can come from any IRS Campus.
IRS has a tool you can use that provides more information about some of the notices for individuals and business. https://www.irs.gov/Individuals/Understanding-Your-IRS-Notice-or-Letter.
By selecting one of the above categories and then inputting the letter or notice number, IRS provides a brief overview of the notice/letter. Noted below is Letter 12C:
In addition, by clicking on the Notice or Letter IRS will provide more about what your client needs to do to respond and why the correspondence was issued.
Not all IRS notices/letters are listed in the search database. And not everyone is familiar with how to find the notice or letter identifying number. Generally the location of the letter number is in the upper right hand corner of the notices and many times it is also shown on the bottom of the letter. The abbreviation CP and LTR are often used. It's often located at the bottom of the letter.
If the letter/notice number is not listed in the database, a phone number is provided to address questions, but there is no guarantee someone will answer the phone.
Notice/Letter Looks Suspicious?
The following characteristics are good indicators that the letter is a fraud:
- Spelling and English is poor
- The correspondence is choppy
- The letter looks cut and pasted and does not make sense
- There is a sense it looks copied and worn
You Play an Important Role in this Process
You represent your clients and provide customer services when they bring in the correspondence. You are also their first line of defense when dealing with tax return identity theft. Keeping up on ID Theft procedures. Being able to identity a fraudulent notice is a skill you must learn. You are also CALT’s ear to the ground when things do not seem right, when the notice doesn’t make sense or the dates are not jiving. Your information is important in providing a “heads up “to others about problem notices. DO NOT hesitate to call when you are not sure.