“If the IRS [ . . . ] contacts you”
There are numerous reasons why the Internal Revenue Service may contact you throughout the year, so if you receive an IRS missive in the mail, don’t panic. Instead, open the letter and deal with it straightaway. Whatever you do, don’t put it off.
Chances are you are receiving a computer-generated letter because the IRS thinks you owe it money. This is likely due to a mistake on your tax return, such as failing to include all your income. But the IRS is often NOT correct, so before you automatically pay the bill, do some investigation. It’s very possible that the income from one or more W-2s or 1099s is being credited to your account in error. Or they identified stock that you may have sold, and they assume that you had paid nothing for that stock, asking you for tax on what you sold it for.
Even if the income is yours, the amount is correct, and you really did leave it off your tax return, double-check the IRS’s work by adding the missing numbers to your return and recalculating your taxes. IRS and state computers often make mistakes and you might save some money.
The best piece of advice is seek out your preparer, enrolled agent, or CPA, particularly if it is an audit. What may appear to you as a daunting task can often be dealt with just a single letter, or an hour or two’s time with an IRS agent. And if the IRS should give you call on the phone, consult with your accountant before you talk with them. Often a seemingly innocent question and answer session can create a web of questions.