Every year, millions of letters and tax notices are mailed out to taxpayers. With the hiring of more personnel to conduct audits and process collections, more taxpayers may find themselves receiving these letters and notices than ever before. What should you do if you receive a tax deficiency notice from the IRS or State of New Jersey?Never ignore a notice of tax deficiency.
First and foremost, always respond to the notice. Ignoring the notice or delaying your response will affect your ability to positively resolve the issue.
Most notices come in envelopes that are bar coded for your response. Use the bar coded envelope to ensure that your information reaches the tax office and individuals who are handling your case.Don’t panic.
The notice may not even be a bill. It may just be a request for more information or an inquiry that can be resolved with no additional tax liability. Take a deep breath and analyze the situation. Who is the notice from?
Do not assume that the notice is from the IRS. It could be from the State of New Jersey. What year is the notice for?
Determine which tax return is being questioned. Most notices are for prior year returns.What is the notice about?
IRS notices can be about unreported income, unfiled tax returns, duplicate claims for dependents or line items on the return. State notices can be about real estate tax deductions, credit for taxes paid to other jurisdictions or NJ Earned Income Tax Credit (NJEITC). What action should you take?
If you had your return professionally prepared, your tax preparer is your first line of defense. He or she should be able to explain why you received the notice and what it means. A tax professional will know what response is required and can help you verify the information on your return.
If you prepared your own return, call the telephone number on the notice to get an understanding of what the notice is about and what needs to be done. But be forewarned
: tax authorities are not going to spend a lot of time helping you respond to the notice. They assume that the notice is correct and will encourage a taxpayer to send in a check. You may benefit from seeking professional help with your notice.
Remember, help is available from your local tax professional. We are always at your service!Attention NJ Taxpayers claiming Earned Income Tax Credit!
If you have received a notice from the State of New Jersey denying the Earned Income Tax Credit, or your refund containing this credit has been delayed, call the Division of Taxation Customer Service Center at (609) 292-6400. You may be asked to provide proof of eligibility for the credit such as a copy of your child’s Social Security card, copies of your W-2s, and a copy of your federal tax account transcript from the IRS.Donna Vitale Tax Preparation, LLCDonna Vitale
is a former IRS tax auditor who has been involved in tax advising, planning and preparation for 37 years. Donna specializes in small businesses and in helping new businesses get started. She guides new business owners in choosing and forming a business structure, obtaining their Employer Identification Number (EIN) from the IRS, and in registering their business with federal, state and local revenue agencies. In addition to business consulting and business startup advice, she also offers payroll services for small businesses.
Donna is a Registered Representative of Genworth Financial Securities Corporation. She can also advise business owners on pension plans, insurance and investments.
Donna, and her office manager Nancy Bancroft, are committed to helping small business owners and individuals reach their financial goals. They welcome new clients and are proud of the personalized service they provide. Donna Vitale can be reached by calling (856) 228-0353 or by email at firstname.lastname@example.org.As seen in Burlington County Woman and Camden County Woman (Spring 2012)