A tax notice is a communication sent by a tax authority to a taxpayer regarding their tax obligations. It is typically issued when there is a discrepancy or an issue with the taxpayer's tax return or payment.
Tax notices can be triggered for various reasons, such as errors or inconsistencies in the reported income, deductions, credits, or other tax-related information. The notice usually provides details about the specific issue or concern and may request additional documentation or clarification.
When a taxpayer receives a tax notice, it is important to read it carefully and understand the reason behind it. Common types of tax notices include: Underreported income: This notice informs the taxpayer that the tax authority has identified unreported income or income discrepancies on their tax return. Incorrect deductions or credits: The tax authority questions the validity or accuracy of certain deductions or credits claimed by the taxpayer. Math errors: This notice indicates that there are mathematical errors on the tax return, such as miscalculations or inconsistencies. Request for additional information: The tax authority may request additional documentation or supporting evidence to verify the information provided on the tax return.