One common reason taxpayers write a letter to the Internal Revenue Service (IRS) is to request a penalty abatement waiver. This is a form of relief granted by the IRS, which removes tax penalties resulting from failure to pay tax debt on time, file a tax return, or pay taxes when due.
As a taxpayer, writing a letter to the IRS allows you to clarify issues surrounding your case. By knowing how to write a letter to the IRS, you can increase your chances of getting approved for the waiver.
6 Essential Tips for Writing a Letter to the IRS
Receiving a notice from the IRS can be nerve-wracking. However, as long as you’re working with a tax negotiation services company, you have nothing to fear. Here are some writing guidelines to follow when corresponding with the IRS.
1. Follow the business letter format
Your reply letter should be in a business letter format. Use a standard font such as Times New Roman or Arial to give your letter a professional look. An ideal letter is also single-spaced and uses block paragraphing. No indentation is needed before each new paragraph, as a business letter typically follows a full block format.
Your letter should include the IRS’s address, a subject line, your personal information, date, and salutation. Start by placing the IRS’s address along with the tax period, tax form, and subject on top of your letter.
Next, include your contact information below the first block. Write with your name, address, Social Security number, and date. Then, you can begin with the standard greeting “To whom it may concern” and proceed to discuss your issue.
Internal Revenue Service
(Write the IRS’s address here)
Tax Period: 2021
Tax Form: (if any)
Re: Request for First-Time Penalty Abatement Waiver
From: John Doe
123 Main St., Anytown, USA
Social Security Number: 888-88-8888
Date: July 18, 2022
To Whom It May Concern:
2. Explain why you qualify for a penalty abatement
Since the IRS takes penalty abatement requests on a case-to-case basis, the body of your letter should mention the reasonable causes that may entitle you to penalty abatement. The IRS may consider reasonable grounds for late filing or payment.
Here are some common examples of reasonable causes:
- Death of an immediate family member
- Serious illness or incapacitation
- Destruction of tax records due to calamity
- Social unrest such as riots, demonstrations, and other disruptive assemblies
- Erroneous advice from a tax professional
Then explain how you have complied with the penalty abatement waiver criteria set by the IRS. Depending on the type of waiver, these may include:
- Filing compliance: You have filed all required returns or filed for a valid extension. Also, you have no outstanding request for a return with the IRS.
- Payment compliance: You have paid or made arrangements to pay all taxes due.
- Clean penalty history: You have not incurred any tax penalties for the last three years.
3. Include a copy of the IRS notice you received
If you are responding to an IRS notice, be sure to include a copy of the notice when you send your letter. This will help the IRS easily reference the information. Also, indicate the notice’s date and purpose in your reply.
For instance, you may write, “I am responding to your letter dated July 12, 2022, regarding my 2021 tax return (please see attached IRS notice).”
4. Identify additional enclosures
If you plan to attach other documents to your reply letter, take the time to identify what they are. You could add the word “Enclosure(s)” at the bottom of your letter. Then, put the descriptions of the attachments below it.
The enclosures note will help remind the IRS that you included additional items in the letter. If you intended to include some files but forgot to do so, the note will alert the IRS that there are additional documents expected from you.
- Copy of Account Transcript for Tax Year 2021
- Copy of Medical Certificate
5. Close the letter on a friendly note
Even if you’re dealing with a stressful situation such as an IRS penalty notice, you must stay courteous. In your letter, politely state that you are available to answer any questions the IRS might have. Also, provide your contact details and thank the IRS in advance for attending to your concern.
For instance, you may write, “If you have any queries, please feel free to contact me by phone at 1-111-111-1111 or mail me at the above-listed address. Again, I appreciate your attention to this matter.”
Make sure to put a formal closing, such as “Sincerely yours” or “Respectfully yours.” Finally, don’t forget to sign the letter.
6. Send your letter as soon as possible
Time is of the essence when dealing with an abatement, especially when filing a formal protest. So, be sure to send your letter as soon as possible. This can increase the chances of your appeal getting approved and your issue being resolved.
Communicating with the IRS
Writing an appeal letter to the IRS may sound like a daunting task, and sometimes it is especially when you are not a tax representative in this area of expertise. By keeping in mind the tips discussed above, you can increase the likelihood of your request getting approved.
If you are faced with a tax problem and need a negotiation expert to help you settle the issue, reach out to us at Peace of Mind Tax Help. Our team of experts in tax negotiation and mediation can help you minimize your tax liability. Get relief now!