Literally thousands of dollars are involved annually in IRS errors. Some people receive a higher refund than what they're entitled, but, as much as they would like to think so, this isn't a gift"it's prone to be an error. Cashing these checks can and will lead to bigger IRS issues. If you discover you have made an error related to filing or paying taxes, be proactive"it'll likely be less expensive and complicated to correct errors that you discover rather than waiting for a notice from the IRS. Even if you do receive a notice, Jo Carole Klepack, a tax manager from New York, advises, “The first rule in replying to an IRS notice is not to assume that they are correct." Before your issue is resolved, you will probably receive more notices because IRS computers issue these. Stay on course and don't panic.
Recognizing that such errors occur, the IRS provides a wide array of forms for taxpayers to use to report different types of errors. You may use the following forms to report corrections:
" Forms 94X, Employment Tax Adjustments
" Form W-2C, Corrected Wage and Tax Statement, and Form W-3C, Transmittal of Corrected Wage and Tax Statements
" Form 1040X, Amended U.S. Individual Income Tax Return
" Form 1065, U.S. Return of Partnership Income
" Form 1120S, U.S. Income Tax Return for an S Corporation
" Form 1120X, Amended U.S. Corporation Income Tax Return
" Forms 1099 and 1098: These are examples of information returns.
" Federal Tax Deposits: If you are not required to make your deposits electronically, be sure to include a Form 8109 with each deposit you deliver or mail to an authorized depository.
When mailing your forms off, include a letter, and send all copies of legal documents by certified mail to ensure receipt. However, if the mistake is of a sizeable portion that includes a significant amount of money, it's more beneficial to get professional tax advice and/or visit an IRS office. Instead of waiting for your letter to be read, dealing with an IRS agent face-to-face is better and faster. Visiting an IRS office will not invoke a further examination of your records nor will you be "bothering" the agents. On the contrary, you'll be bringing a mistake to their attention more quickly so they can freeze proceedings immediately until the matter is resolved. They'll like that.