IRS Letter 5041 – Follow Up Notice

The IRS needs additional information on the unusually low portion of gross receipts from non-credit card sources (cash, checks).

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Type of Notice: Return accuracy

Most common tax problem area: Business audits

Other tax problem areas: Business penalties, Unpaid business taxes

Why you received IRS Letter 5041

  1. You received income through a credit card merchant account and/or through other third-party network transactions.
  2. You filed a tax return reporting business income.
  3. The IRS thinks that your tax return shows an unusually high portion of gross receipts attributable to credit card payments. The IRS would typically expect a higher portion of gross receipts from cash and checks for your type of business.
  4. Letter 5039 was sent to ask you to complete Form 14420, Verification of Income and you responded.
  5. The IRS sent Letter 5041 as a request to provide additional information. The notice lists the specific items you need to address. You can use the attached Form 14420 to complete the outstanding items.

Your options to address IRS Letter 5041

  1. Provide the information requested

Notice deadline: 30 days

If you miss the deadline: Failure to respond may result in the IRS auditing the tax return or sending a notice proposing additional tax, penalties and interest.

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