RTS #060 Couldn’t some of that budget be used on a new font?

It’s not hard to find headlines and articles about the billions of dollars in additional funding the IRS has recently received and how they are using it…but can’t they spare just a few dollars to update the font that gets used in IRS “love” letters? I know that sounds like a joke, but I for one would be all for it.

If you haven’t had the pleasure recently of seeing notices the IRS mails to taxpayers (including your clients), even the simplest letters are anxiety-inducing. Even though I think the font makes it look like it was pecked out by someone in a basement in Montana, there is plenty else about these notices that causes anxiety for clients. Just the envelope with a return address of “Department of Treasury” is going to cause most people to pause and worry before they’ve ever opened it to see what’s inside.

Summer tends to be the prime time for these letters, so this week, I wanted to provide some reminders to help defuse these tense situations and help clients have positive outcomes (or at least not have to navigate the process alone).

• Regularly remind clients you want to be involved in the process – your clients should feel comfortable sending anything money-related your way. In fact, that should be one of their first thoughts: “I should ask my Advisor; they’ll get me pointed in the right direction.” I run into taxpayers regularly who have tax pros who won’t help them deal with these letters, so they will feel on an island if they don’t think they can turn to you. The great news is you don’t have to be an expert yourself, commit to helping find an answer even if you don’t know it (yet).
• Fact-check all IRS letters – the starting point is helping your clients fact-check the letter. The RTS team has helped multiple clients just this year respond to IRS letters where the IRS was just plain wrong. Letters with incorrect numbers, amounts applied to incorrect years, or misapplication of IRS rules on their own forms!
• It’s like getting pulled over – it can be helpful to let clients vent and share in their frustrations, but remember that when you are communicating with the IRS, they hold all the cards. Which means your clever, snarky responses will not help the client. It might take a couple of tries, but your client will have a better outcome if you help write a response that doesn’t insult the intelligence of the person who will open and read the letter (yes, it will be a human on the other end).
• Set clear expectations – especially if you are contesting anything in an IRS letter, to help clients understand that resolving these issues can take time. The IRS receiving and responding to your initial letter can take months and we regularly see issues that take multiple rounds to get cleared up. The most frustrating situations are ones we did not think were possible, so let clients know it will take at least a few weeks and possibly several months for the issue to be addressed.
• Always use certified mail – just like everything else we do in tax planning, make sure there is a paper trail.
• Find help – if the amounts get large or the issues get complicated, don’t be afraid to help your clients find experts in tax resolution. There are people who constantly work on these issues and are experts in dealing with the IRS. Even if you aren’t the one resolving the matter directly you can provide a great service to your clients by helping vet a professional and sharing information that will expedite the process.

Ideally, your clients are working with tax pros who proactively help with these issues, but it pays to be aware and to be involved.

Happy Tax Planning!