What do I do if I don't understand why the IRS thinks I owe them money?

The easiest thing to do would be to contact the IRS to see if they can provide you with an explanation. You can call them, but be prepared to wait for assistance. It may be better to go in person to your local IRS office. Note also that the IRS has a Taxpayer Advocate Service that helps people navigate the bureaucracy and obtain answers. Contact and other information about the IRS and its offices can be found at the following we page: http://www.irs.gov/localcontacts/article/0,,id=98259,00.html Good luck.

You can ask for a meeting with a revenue officer to explain this. The IRS should have told you in that letter that you could disagree with them. This "disagreement" must be in writing. Ultimately, if you and the IRS can't agree you can pay the tax and then sue the United States for a refund or you can sue the Commissioner of Internal Revenue in Tax Court without first paying the tax. You must pay attention to what the IRS sends you. You have 90 days to sue in Tax Court after you receive what is called "Statutory Notice of Deficiency."

If the IRS sends you a letter claiming that you owe them a balance due, they will have some basis for doing so. If you call IRS, they should be able to tell you the source of their tax assessment, from their internal records, which are based on the tax returns you filed. Once you have established the accuracy of balance due number, you can proceed with a resolution proposal.

(1) There should be a telephone number on the Notice. Call it and ask. (2) If someone did your taxes for you, ask him or her. (3) If you don't want a free answer from IRS, and didn't use someone to do your return, make an appointment with a CPA or a Tax Attorney and pay for their time.