When Maryland residents have their tax returns accepted by the IRS, it doesn’t mean that there weren’t any errors. In a given year, millions of people will receive a notice from the IRS, and mistakes could lead to an individual paying more to the government. However, it is worth noting that a notice is not the same thing as an audit despite the feelings it may stir in a taxpayer.
In 2016, there were 1 million audits conducted, which was a 30 percent drop from 2011. That compares to 5.1 million notices that were sent out, which were focused mostly on math errors or income that was not reported. The IRS may send out a notice or audit a tax return for up to three years after it was filed. Furthermore, notices can be received throughout the year.
Taxpayers are urged not to panic when they receive a CP2000 notice from the IRS. In most cases, the government is asking for payment of tax owed because of minor and honest mistakes. As a general rule, taxpayers should respond to an IRS notice within 30 days with the information that it requests. Doing so may avoid any further penalties or interest from accruing, and taxpayers are allowed to dispute any IRS claim that they owe money.
Those who receive an income tax audit or notice are generally advised to not ignore it. Instead, it may be a good idea to talk to a tax attorney about what it says and determine the best way to respond. By working with the IRS, it may be possible to resolve the matter in a favorable manner.