IRS Collection Notices: What do they mean?

IRS Collection Notices: What do they mean?

When an IRS letter or IRS collection notice arrives, many people are unsure what it means and what to do to respond. IRS letters all look the same, and can be intimidating because of what is at stake.

If a person has tax debt due to the IRS, and does nothing about it, then eventually the person’s account will go into IRS collections.The collection process may take some time, up to several months. Each collection notice usually comes five weeks apart.

Different types of IRS Collection letters – What are the different types of IRS Tax Collection letters?

CP14 This notice is for when a person has a balance due

CP501 First reminder notice for the overdue balance due

CP503 2nd notice to remind a person of their balance due

CP504 Final Notice of Intent to Levy. This is when the IRS gets really serious. This notice says if the amount is not paid in full after this 3rd and final notice, then the IRS will levy the person’s state income tax refund.

CP90 This notice represents the IRS intent to seize assets and gives notification of the person’s right to a hearing. Retirement benefits, real estate, salaries, automobiles, bank accounts etc can be included in the levy

CP91/CP298 This notice represents the IRS intent to seize 15% of social security benefits to pay the unpaid balance that is due.

CP297 This notice represents the IRS intent to seize assets and is sent to the subjects business. The IRS will levy assets if no action is taken.

LT11/LT1058 This letter is the Final Notice of Intent to Levy and Notice of Your Right to Hearing. This indicates that the IRS has made numerous attempts to collect the balance. If no further action is taken within 30 days, the IRS has the right to levy or seize assets. The IRS may also place a Federal tax lien on your property.

The most important and serious IRS collection letters

CP90/297 Final Notice of Intent to Levy and Notice of Your Rights to a Hearing

CP91/298 Final Notice Before Levy on Social Security Benefits

These two notices are the only notices that allow the IRS to start proceedings in order to seize your assets, vehicles, bank accounts, real estate and business assets. The other notices can be important and urgent, but they are not threatening any action. Only these final notices gives the IRS these legal rights to start the proceedings.

When a person receives a Final Notice, he/she must realize that it provides important legal rights. These rights include the ability to file an appeal to have a hearing to settle the case and take the results to a U.S. Tax Court if it is not acceptable. The IRS collection action is halted while the appeal is pending, provided it is filed within 30 days from the issuance of the notice.

Actions to take when a person receives an IRS collection letter

Taxpayers are generally extremely anxious when they receive these types of IRS notices. The best thing to do is to stay calm, read the letter and check if it is a Final Notice. Taxpayer assets are in danger if it is a Final Notice.

If a person agrees with the balance due, look to the tax resolution with a payment plan, currently not collectible status or offer in compromise. This decision must be made quickly as active collections are taking place. The best way to get tax help is from a tax attorney who will work to get a resolution that is most favorable to you and your financial situation.

If you do not agree with the balance due, submit the required information to validate your claim.

Remember, when you submit any information to the IRS, to always keep copies for your records.  Please call for a no-cost tax attorney consultation for a tax resolution.  We look forward to helping you.  This blog post is not intended as legal advice and should be considered general information only

Keywords:  IRS collection notices, IRS Collection Problems, IRS Collections, IRS Final Notice, IRS levies and property seizures, IRS Seizures

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TAX COMPLIANCE WITH THE IRS FOR TAX RESOLUTION

TAX COMPLIANCE WITH THE IRS FOR TAX RESOLUTION

Ever wondered if you could sole your tax problems with the IRS? Or maybe you don’t know how to go about it? The first and most important thing you need to do if you want the IRS to favor you in stipulated tax resolutions is; Tax compliancy. You must be tax compliant. The next question that should come to your mind is; what is tax compliance?

WHAT IS TAX COMPLIANCE?

Tax compliance simply means paying your tax as well as providing and submitting accurate information to tax authorities in required formats and on time. IRS tax liabilities aren’t aimed at a set of people, it can happen to anyone. So, don’t think you’re the only one in this situation. Taxpayers on so many occasions call their tax lawyers for help when they are in tax crisis. Tax liabilities can happen for so many reasons such as; economic meltdown, family issues, poor finance management, sickness, inadvertent oversight, etc.

TAX RETURN COMPLIANCE

Getting tax resolution with offer in compromise and installment agreement isn’t quite difficult. All the IRS requires of you is to be tax compliant. You must fill all required fields in the unfiled tax returns. This is actually not difficult, but most taxpayers find it very difficult to do so. In some cases, they are fraudulent in filing their tax returns.

If you decide to do the right thing by filing the tax return properly; all you need do is place a call through to the IRS requesting for a ‘compliance check’. You will get a list of the years that need to be filed from a representative. Make sure you ask if IRS has filed some returns for those years. You will also need the following to assist you in filing; wage and income transcript, and account transcript. You will need these if you don’t have any record of your own for those non-compliant years.

TAX DEPOSIT AND ESTIMATED TAX PAYMENTS

Tax compliance for all federal tax deposits and quarterly estimated deposits applies to self-employed or business men. Wrong calculation or simple deposit error of the above named deposits which can be caused by a bunch of business and personal reasons make taxpayers run into problems. Most taxpayers use the money for these deposits for something else, hoping to make it back within the year, but they always end up with tax debt and damages.

Even if you fall out of compliance, don’t try to run away from it. Face the problem head-on, many people fall victim of this. School yourself on the rules of tax compliance or get the assistance of a tax attorney. This would prove very helpful.

Estimated Tax Payments for Individuals

If you want to get back on track with your tax compliance, you need to update all your estimated quarterly tax. Their due dates are; April 15^th, June 15^th, and September 15^th of the corresponding year and 15^th January of the next year. You can easily calculate how much your estimated tax payment should be. Simply check your previous tax return and divide your tax liability by four.

Your CPA can also help in calculating your estimates if you believe your next return to be more than the present one. You can also use the IRS estimated tax payment information at www.IRS.gov to get your estimated payments. This would be very helpful in eliminating liability reoccurrence on your returns to come.

Estimated Tax Deposits for Business

Every business man or taxpayer also needs to be up-to-date with their required 941 employment tax deposits and 940 unemployment tax deposits. This should be in addition to your quarterly tax payment. It can also be of an advantage to make quarterly estimated payments for future return years. This doesn’t really change anything, but you can still do it.

You can pay your 941 employment tax deposits either; semi-weekly, monthly, or quarterly. It all depends on the wage allocated to each quarter. You can check-out the IRS Notice 931 for assistance in filing and payments.

You ca easily avoid tax problems resulting to; wage garnishments, bank levies, and tax liens by simple tax compliance. The IRS uses tax return and estimated tax compliance to checkmate taxpayers, to make sure they don’t incur tax debt at tax times.

Feel free to contact the Los Angeles Tax Attorney at Delia Law for a no-cost tax attorney consultation. The Los Angeles Attorneys have years of experience in tax preparation and tax resolution experience. We are sure of perfectly representing your interest before the IRS. You can reach us on (310) 494-0100. We look forward to hearing from you, and also help you become tax compliant.

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