When tax season comes around, you receive a lot of tax forms, but frequently, the senders also send copies to the IRS. These documents, which go by the name of information returns, are frequently records of specific payments you made or received during the tax year and are typically required to declare on your tax return. W-2s, which list the salary received from an employment, and 1099s, which list the money received for things like freelance labor, dividends, or interest, are two of the most popular information returns.

Meeting Your Match

Why were duplicates made of each of these? Information returns are used by the IRS as a verification tool. When you file your tax return with the IRS, whether electronically or on paper, they go ahead and match what is in their system of records and compare it to what is on your return.

They'll typically send you a letter informing you that the amounts differ if there is a discrepancy between the two. It has been observed that clients get notifications for very small amounts. However, two things can help prevent the headache.

Do not disregard it or record a different amount on your tax return if your employer issues you a W-2 that overstates your earnings. If you receive the incorrect one, your best course of action is to get in touch with the person who issued it and request a correction.

If someone else states you had that income, it's quite difficult to refute that claim.

You can file IRS Form 1040X to modify your tax return if you receive an unexpected information return after filing your taxes or discover one you stuffed in a drawer weeks earlier. The best course of action would be to submit an amendment prior to receiving the letter.

Consider everything carefully before writing a check if the IRS sends you a bill for additional taxes and claims you owe them because your return wasn't reflected in its records. Many people just pay it even though they may not actually owe the money. To find out what they believe you failed to disclose, read the information, then check your return to see if it's truly there.

The problem is frequently that your tax return has somewhat different labels than the information return. The IRS is incorrect more often than not, even if the form was completed properly, but the matching process isn't always accurate. They are mistaken nine times out of ten; we are correct. We only need to assist them in finding the right match.

You can get in touch with MC Tax Relief if you're looking for reputable IRS problem solvers.