ALL CORRESPONDENCE FROM THE IRS MUST BE READ!

Receiving a letter from the IRS may send a chill up your spine. What should you do?

The IRS sends out a variety of letters to taxpayers. Some are informative, some are merely requesting additional information after a tax return has been filed, and some are demanding payment for taxes owed. The worst thing you can do is to ignore an IRS letter with a deadline stated in the letter for a timely response. If you miss the deadline, it will become harder to contest the content of the letter.

Many IRS letters contain a “CP” number in the upper right-hand corner. The letter contains an explanation of the tax due and the options you have: to contest it or to pay it (even if you can’t pay it all at once).

Once there is an unpaid tax balance, the IRS simply starts with a reminder notice that you are late in paying your tax. The first CP14 reminder notice comes shortly after you file your tax return. It simply lists the amount of tax due along with penalties and interest that have accrued since the filing date. If you believe the balance due is incorrect, you must either call the IRS or respond to them in writing soon after receiving the letter. When in doubt contact a tax attorney.

Letters CP501 and CP503 are the next reminders that will appear in your mailbox if the tax still has not been paid and no arrangements for payments are in place. These notices again alert you to the amounts owed for taxes, penalties, and interest. If you have tax balances due for a number of years, you will receive one letter for each tax year owed.

The CP504 letter, next in the series, signifies a serious situation. It notifies you of the IRS’ right to file a lien against you and to levy (seize) any state income tax refund you might be entitled to. When the IRS files a lien against you, it is very difficult to remove it until you fully pay the balance due.

The next correspondence, LTR11 or CP90, will notify you of the IRS’ intention to levy your bank accounts, wages, Social Security checks, and any of your other property the IRS can find, such as real estate and vehicles.

After receiving notification of the IRS’ intent to levy, you have only 30 days to respond before the IRS can start seizing your assets. The IRS looks for available assets, held under your name or Social Security number, and starts collecting them until the IRS has recovered the total amount of taxes, penalties, and interest due.

As you can see, the IRS collection division has an established procedure for notifying taxpayers and collecting outstanding balances. Therefore, all correspondence from the IRS must be read so you can determine your rights as a taxpayer.

If you have been contacted by the IRS, you should promptly seek the advice of a tax professional who can help you in choosing the appropriate resolution.

We are ready to assist you. Please feel free to contact Glick and Trostin, LLC at 312-346-8258 for a complimentary consultation

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