Confused by the IRS? Here's where to start.

You may have heard us say “this has been a strange and challenging tax year” once or maybe twice this tax season, due to the constant and frequent legislation updates. We thought the surprises were over, but it seems we were wrong. Unfortunately, here we are again using that exact same phrase after receiving multiple emails and calls from our clients stating they have received a confusing IRS letter with either adjusted refunds, adjusted stimulus check amounts, or requesting money. We, as well as other accounting practitioners, are trying to figure out why all of a sudden the IRS is sending out letters with adjustments and little explanation.

We are working with other practitioners and our legislators to assess the situation with the IRS.  It is important to keep in mind that each tax return is completely different so there is no one general answer for all the notices. 

In the meantime, If you receive one, please do the following. Please note, we will not look at details on your notice or advice on steps to take until we have the following information:

• Send us a copy of all pages of the notice (via SmartVault)

• Confirm if you received a payment during the year and for what dollar amount.

• Confirm you did not receive a payment during the year.

• Pull your transcripts and upload a copy (via SmartVault) or be prepared to accept a request for the same through the IRS's new system.

Of course, if ever there is an error on the part of Sherwood Tax, we are happy to resolve it as part of the tax return preparation process.  In the cases we have reviewed so far, however, the error seems to be on the side of the IRS, which unfortunately we cannot control. 

If you would like us to contact the IRS and research on your behalf, we can do so as a separate engagement. Please let your client service manager know if  you would like us to prepare a Power of Attorney form to begin this process. 

If you have any questions, please email us at cpa@sherwoodtax.com.