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Tax Alert: The IRS is Delivering Surprises This Holiday Season

 

 

 

This holiday season, the IRS has been quietly sending out adjustment notices that require quick action. While they’re not exactly sneaking down your chimney or stealing your roast beast, like the Grinch these notices could still catch you off guard.

 

The IRS is reviewing businesses that claimed Employee Retention Credits (ERC) during the pandemic. These credits were meant to help businesses keep employees on payroll during tough times.

 

The notices propose changes to the refund you received and a balance due to the IRS. However, these IRS calculations are very basic and are often inaccurate. Don’t automatically assume they are correct.

 

The notice will likely suggest that you need to return a portion of the refund you received. 

 

Here’s why this is a problem:

1. Short Deadlines: The IRS is giving you very little time to respond.

2. Holiday Timing: These notices are arriving when people are busy or out of the office, so deadlines can easily be missed.

 

 

• Reduce or cancel the credit.

• Send you a bill for the difference.

• Start collecting the amount they say you owe.

 

1. Watch Your Mail: Check for any IRS notices that come your way.

2. Act Fast: If you get a notice, send it to your tax professional immediately.

3. Challenge It: Your tax professional can write a letter disagreeing with the IRS’s changes. This letter will buy you more time while they review your case.