IRS question?

Question

We received a letter the other day telling us our 2005 taxes are being reviewed. What exactly does this mean? Are we being audited? Is this going to turn into one huge headache for us? If you've ever received a letter from the IRS telling you that your tax forms are "being reviewed", please let me know about your experience. Thanks

Answer 1

If you didn't report all your wages for the that tax year might mean you might owe some money now. Or if you took EIC and weren't allowed, Call the phone number provided in the letter and ask, some of the IRS phone lines there is a long wait, so be patient, just like anywhere you call now. Nothing to worry about, if you ended up owing and can't afford to full pay, IRS will give you payment options. You can request and Direct Debit Installment agreement $52.00, a one time user fee charge. and a reqular installment agreeement which they charge a onetime user fee of $105.00, the minimum payment acceptable is $25.00 for balances of $1500.00 or lower. usually give you 60 months to pay off any balances, and of course at the time you file your return and you have a refund it will be offset to any balance dues.
Relax.

Answer 2

Yup.. they are looking at an item or 2 that fell outside the normal parameters. As long as you didn't knowingly make false claims (MAJOR ONES) you will probably just have to provide detailed proof for the deduction or pay the difference in taxes. No big sweat.. IF you really contrived to defraud Uncle Sam (IN A BIG WAY) then you will probably need an attorney.

I had them challenge me many years ago and they wound up saying ok to the deduction in the end.

Answer 3

Something on your return was identified by their computerized review metrics as being "outside the norm." It may turn out to be as simple as submitting documentation of a claimed deduction.