The LTR 306C explains a correction or discrepancy the IRS identified during return processing. Unlike notices that simply show a balance due, the LTR 306C provides detail about what was changed and why. It's the IRS's explanation letter.
What to Look For
The letter should identify the specific line items that were changed, the original amount you reported, the corrected amount, and the reason for the correction. Compare each change to your original return. Determine whether the IRS's correction is accurate or whether your original entry was right.
Common Corrections
Arithmetic errors on the return, withholding credits that don't match the W-2s the IRS received, estimated tax payment credits that differ from IRS records, dependent exemptions or credits that the IRS's system flagged, and entries that exceed statutory limits.
If You Disagree
Respond in writing to the address on the letter. Explain which corrections you dispute and provide documentation supporting your original entries. If the corrections were made under math error authority, you have 60 days to request abatement.
If You Agree
No action needed if the correction doesn't affect your balance or refund. If the correction results in a balance due, pay it promptly. If it results in a larger refund, the IRS will process the additional refund automatically.
If you need help understanding the corrections, call us at (813) 229-7100.