Recently a client came into the office with that so called dreaded IRS letter, they were totally distraught because the letter claimed they owed thousand of dollars for 2013 and had only two weeks to make payment.
Well my first reaction was the review the letter and secondly explain the situation or reason for the letter to my nervous clients.
Apparently, in 2013 the State of Florida issued a form 1099-G (unemployment compensation) to the IRS informing them that my client was issued unemployment compensation that year.
Since the client's return did not include unemployment compensation for 2013 then basically the IRS was attempting to correct the return.
Unknown to my clients, someone had fraudently used the taxpayer's information and filed for unemployment benefits, and received it.
I went on to explain exactly what was needed to to correct this situation, first with the State and finally the IRS.
From my experience I know that the majority of taxpayers do not want to receive what has been called the Dreaded IRS Letter, they totally freak out.
In this situation that dreaded IRS letter turned out to be a blessing. Simply because it made the taxpayer aware that something fraudlently had happened to the taxpayer in 2013, two years later.
As to how this fraud transpired and why the State issued funds to a crook is another story.
If you receive a letter from the IRS that you don't understand you should immediately contact a professional tax preparer or Enrolled Agent.
I'm busy working on my blog posts. Watch this space!