Just because you receive a notice on official letterhead does not mean that the notice is correct.  Their people and computers can make mistakes.  One of the most common notices, the CP2000 does not include basis information with stock sales so they incorrectly assume that the total sale is a gain.  As often as not, especially in recent years, unreported stock sales result in

It is critical to respond to an IRS or NC Department of Revenue notice (or any other state) in a timely manner.  Often, they give you 30 days to respond.  When you respond you want to make sure that you are also up to date on all other compliance related items- they need that compliance in order to work with you.  When you send in a response, either use fax or postal service delivery confirmation to show when they received it.  Next week, we'll wrap up the notices section.