The Letter That Was Not a Scam
In a time when we are bombarded with spam calls, texts and junk mail, often our first thought when something seems suspicious is, “it’s a scam” and trash it.
A new client came to me recently holding a notice stating the IRS proposed an additional tax due and she owed roughly $900,000. Her question was simple, “Is this real?”
By the time she came to speak with me about it, she was holding the third notice.
Six months earlier, the IRS had sent the first notice proposing the additional tax. She showed it to her previous accountant, who told her it was “probably a scam” and throw it away. She did.
I logged into her IRS online account through ID.me while she sat across from me in my office. Every notice mailed to her was there. Both the first and second notice.
The first one showed the proposed tax due. The second was a Statutory Notice of Deficiency, referred to as the “90-day letter,” which is the IRS’s last word before the tax is formally assessed.
The distinction matters.
If you respond to the first notice, this can be resolved with a phone call and a form submission. In this case, the income tax being assessed appeared to be someone else using her Social Security number.
If you do not respond and the 90-day letter follows, the only way to contest the tax without paying it first is to petition the United States Tax Court. Your petition form must be filed by the date printed on the notice which allows for a 90-day time frame.
That date is set by statute and the IRS cannot extend it. Despite contacting them, it does not stop the clock on proceeding with your case.
Once the case is docketed, the evidence is assembled including a police report, IRS Form 14039, the report made to the FTC’s IdentityTheft.gov and the fraud claim with the payment processor.
This work takes months to complete. Responding right away is always the best option.
Every taxpayer should have an account login at IRS.gov to track any notices, view your transcript and confirm information if something seems out of order.
If you get a letter from the IRS that does not make sense to you, login at IRS.gov and see what their transcript states. If you do not understand what they assessed or disagree with their information, do not wait to address it.
Contact your CPA immediately, make sure all your tax filings are up-to-date and be proactive in resolving your case.
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