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How to Write a Letter of Explanation to the IRS (with samples)

By Thelma Sample on Mar 20, 2014 in Taxes |

If you have received a written notice from the IRS requesting an adjustment to a recent tax return, requesting additional documentation for your return, or if the IRS sends notice that your payment is late, you will need to know how to respond appropriately.  Keeping the lines of communication open is key to a successful resolution of nearly all tax issues.  While putting your response in writing might sound like a daunting task, it is very likely to be the best and most effective way to respond to the IRS.

There are several key things to remember when writing your letter of explanation to the IRS:

  • Present your information in a straightforward and clear manner, addressing all questions raised by the IRS
  • Respond quickly and adhere to any deadlines in the correspondence from the IRS.  There are likely to be instructions to follow.  Follow them carefully.
  • Provide additional or supporting documents that are needed to support your perspective.  For example, if the IRS has noted that you did not include income in your return for a small contract position and you simply forgot to include the 1099 on your tax return, include a copy with the letter
  • If you think that the IRS letter is a mistake or contains erroneous information, outline your explanation clearly and concisely, with a tone of respect.  It is in your absolute best interest not to inflame the situation.
  • Include accurate contact information and personally sign your letter.
  • Get help if you need it.  It is wise to find a reputable tax firm that can help you manage all communication with the IRS.  With 30 years of experience in this area, Success Tax Relief (877-825-1179) has helped thousands of customers all over the country with complicated communication with the IRS.

We have included a sample template below that you can use in response to a potential error that the IRS has raised.  Please note that you should insert as much unique information as possible into this template to communicate about your specific tax issue. This means if the issue raised by the IRS is not “failure to report income related to a small contract position,” you should rewrite this section to reflect what you’re being contacted about.

Also be aware that the address you insert under “Internal Revenue Service” should match the address on the correspondence you have received. Only include the field for “Tax Form” if a specific form was referenced in the correspondence you received.

If you’re not sure what to include in your response to the IRS, contact Success Tax Relief today and let us deal with the IRS!

Sample IRS Penalty Abatement Request Letter

Here is a sample letter to request IRS penalty abatement. You can use this template as a guide to help you write a letter. However, if you want to improve your chances of your request being accepted, you should work with a tax professional. If you are making a first-time penalty abatement request for a year, please see this page. If you are requesting the abatement of a certain penalty for more than one year, you will need to have reasonable cause.

To: Penalty Abatement Coordinator
IRS Campus
(address provided on notice of tax amount due)

Re: Request for Penalty Abatement

From: John Doe
123 ABC Street
San Diego, CA 92109
SSN: 123-45-6789

February 3, 20xx

To Whom it May Concern:

I am writing to request an abatement of penalties in the amount of $3,673.67 as assessed in the enclosed notice that is dated 7/9/XX.

The reason why I _________(pick one)

  • Paid late
  • Filed late
  • Failed to report income

was because ____________ (pick one)

  • I had a serious medical condition
  • My house burned down
  • My documents were stolen
  • A close family member died
  • Any other reason that prevented you from complying with the IRS requirements

Please find the enclosed______ (describe your supporting documents)

  • Death notice of a family member
  • Letter from a doctor stating the conditions of your illness that prevented you from filing or paying
  • Picture of house burned down in fire
  • Insurance notice of theft of private property and documents
  • Any other proof or supporting documents

Please accept my petition for abatement of penalties owed for reasonable cause. If you have any questions or need any additional information, you can reach me at 212-222-3333. I have also enclosed a payment that covers the amount of taxes I owe, less the penalty portion.

Sincerely,

John Doe

Note:

You do not need to include a tax payment. However, if you have the money, it is a good idea. It may even help your case. If you don’t have the money, you can apply for an installment agreement to make payments on your tax debt.

When you send your supporting documents, make sure to only send copies. The IRS is known for “losing” documents.

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