The IRS is required to notify you by mail if there are any actions taken against you. Here are a few examples of some of the letters you may receive, along with an explanation of what is happening. Our goal is to simplify the letters to help relieve some of your anxiety.
Usually, the first letter our clients receive is a CP14: Notice of Unpaid Taxes. Simply put, the IRS hasn’t received your tax payment for a specific year (or years). There are many reasons why people don’t pay their taxes. Sometimes they forget, they put it off, they didn’t realize they owed, or they simply don’t have the funds. The CP14: Notice of Unpaid Taxes will explain, in detail, what you owe and how old your balance is. Although, it’s always best to act early, you should seek tax advice if you receive this letter and aren’t sure how to proceed.
In time, if a balance goes unpaid, the IRS will attempt to seize funds from any legitimate source of income. We understand the CP504 also known as the LT-11 and LT-16 letters – are scary, but know these are fairly early in the collection process. Just be sure to let us know that the collection process has begun. It is important to act quickly, after about 90 days, if you ignore these notices you would probably receive a levy on bank accounts or wages
If you’ve received this notice, you already received a CP-504 OR LT-11 letter (above) and choose to not take action. This letter serves as a reminder from the IRS of it’s intent to levy. This time, they are serious. If, after 45 days, you still don’t take action, you can expect a bank or wage levy. This letter in automated collection systems is not numbered and just says FINAL NOTICE OF INTENT TO LEVY.
Well, you were warned…. two times, actually, and now the IRS is taking action. Your wages/salary are being levied. Don’t despair though, it’s not too late to take action, but you have to take action NOW if you hope to get the levy released.
The Notice of Levy 668-A is a one-time levy on your bank accounts or other accounts receivable. This will freeze your accounts or any money you are set to receive for 21 days. You can still use the account and, in certain circumstances, you can get the levy released before the 21 day time period is up.
If you’ve received this letter, the IRS has filed to place a lien through the courts on any real estate in which you are listed on the title. This includes real estate that is not your primary residence or is property of a family member where you are listed on the title.
In instances where the amount owed to the IRS exceeds $50,000, the IRS notifies the State Department. This notification may restrict your ability to travel, deny passport applications, or even revoking your passport.
This is the light at the end of the tunnel. It’s what we’ve been working towards all along. A Release of Levy/Release of Property from Levy form means your wages and/or bank accounts are free from levy. This most often occurs when a temporary installment agreement has been agreed upon or your “currently not collectible” status has been changed. After you receive this letter, you can look into options such as an “Offer in Compromise” or penalty abatement.
If you miss a payment or aren’t current on your taxes, you’ll receive a notice of Intent to Terminate Installment Agreement. This doesn’t mean you’ve lost all the progress you’ve made. Often we can do a new and (sometimes) better type of resolution for you. At this point, we only have 90 days from the date of the letter to come up with a new plan.
Otherwise, you’ll face levies again.
The only way to have a tax lien removed from your record for less than the full amount owed is by getting an Offer in Compromise accepted. The tax professionals at Geaux Tax Resolution has over 35 years experience dealing directly with the IRS. Our experience allows us to put together credible offers that the IRS will accept.
Well, the one thing every taxpayer dreads has happened… you’re being audited. There are several things that can cause an audit by the IRS, from multiple red flags on your returns (like an over-use of “employee business expenses”) to just random luck of the draw because you’re self-employed. You can manage this appointment yourself, or hire us (or any licensed tax professional) to be there and represent you during the audit.
If, after your audit, it is determined by the IRS you owe additional taxes, you’ll receive form 4549, also known as a 30-day letter. This letter will show what the IRS disallowed on your tax return. You will also learn what you owe the IRS including accuracy penalties and interest if you fail to make a final defense. You have 30 days from the date of your audit to comply with this letter.
In most cases, when you receive this 90 day letter or Notice of Deficiency, your Audit is over. If you wish to dispute the finding in Tax Court, you have 90 days from the date of this letter. If you decide not to go to Tax Court, you will be expected to pay what you owe or plan to negotiate with your tax professional on what you owe. If you choose, you can still dispute your Audit even if you choose not to go to Tax Court by doing an Audit Reconsideration.
This is a letter that notifies the State Department that issue is resolved. You have entered into an installment agreement or submitted an Offer in Compromise.