Received a bill from the IRS?
First, don’t panic. Second, make sure it’s really the IRS trying to contact you.
The revenue service doesn’t reach out to taxpayers by email, text message or through social media platforms like X and Facebook. It also wouldn’t request personal or financial information such as personal identification numbers, passwords or credit card numbers through email or text. If the notice is demanding immediate payment by wire or electronic check, it’s probably a scam.
If you received a letter, but it looks suspicious, you can call the IRS at 1-800-829-1040 or visit IRS.gov.
If the notice is legit, check the math, said Tom MacAdam, a certified public accountant in Lake Forest who serves high-net worth clients.
MacAdam said if the math is correct, don’t be intimidated and don’t ignore the bill. The notice is simply a computer-generated letter that the agency’s system has flagged because it found a discrepancy in your tax return.
“Don’t ignore it, even if you cannot pay it,” MacAdam said. “Contact the IRS. Work out a payment plan. It is not going to go away.”
The agency will explain why it is contacting you and provide instructions for how to respond. And if the notice requires a response by a certain date, it’s important to meet the deadline because it could minimize any penalty or interest charges and it can “preserve your appeal rights if you don’t agree,” according to the IRS.
Taxpayers should pay as much as they can, even if they’re unable to pay the full amount owed, according to the IRS.
The revenue service offers short-term and long-term payment plan options for qualifying taxpayers. Short-term payment plans are those paying in 180 days or less, with no setup fee. The setup fee for a long-term payment plan is $31 for direct debit (automatic bank withdrawal) or $130 for nondirect debit. Some taxpayers can have the fee waived or reduced if they meet certain income restrictions.
Taxpayers are encouraged to set up payment plans using direct debit, which reduces the chance of default. The IRS requires direct debit for balances more than $25,000.
Tom O’Saben, director of tax content and government relations for the National Association of Tax Professionals, said to also check any correspondence for typos, wrong identifiers — the IRS works through the U.S. Department of Treasury, so check for the correct agency name, such as the U.S. Internal Revenue Service, and ignore scams telling you to buy iTunes gift cards or telling you you that you’re going to prison immediately.
O’Saben said he advises people to create online accounts with the Illinois Department of Revenue and with the IRS. He also advises setting up a PIN with the IRS to prevent identity theft.
“Establish those online accounts so you can have direct access to the information the government has,” O’Saben said. “You don’t have to talk to someone on the phone. You can see all legitimate correspondence and respond. You can also grant power of attorney to a third party, likely your tax professional, so they can also review the information in your account.”
When you set up a PIN, the IRS will mail you the six-digit number, or you can access it online. If the agency’s records show you were a victim of identity theft, it will automatically enroll you into the Identity Protection PIN program.
Taxpayers are assigned a new PIN each year, and it should not be shared with anyone other than your tax preparer. As of Dec. 15, there is no option to opt out of the PIN program, according to the IRS.
“It’s an added layer of protection,” O’Saben said. “If the bad guys ever gain access to your personal information, the PIN can keep them from using the keys to the candy store to file a fraudulent return.”
