The main focus of our practice is income tax representation for individuals. Many taxpayers who contact us at our Raleigh, NC office often reach out in panic because they received a notice from the IRS requesting money to settle back taxes. While intimidating, it can often be helpful to attempt to understand what the IRS notices mean and what should be done upon receipt of an IRS notice.
Below is a highlight of the most common notices received by taxpayers:
- CP-14 – BALANCE DUE: Billing Notice (sample notice)
- CP-501 – FIRST REMINDER: Billing Notice (sample notice)
- CP-503 – SECOND REMINDER: Billing Reminder (sample notice)
- CP-504 – FINAL REMINDER: Threat to Levy (sample notice)
- LETTER 11 – Intent to seize your property or rights to property (sample letter)
- CP-516 – Missing Return (sample notice)
- LETTER – 2566 – Intent to file substitute-for-return (SFR) (sample letter)
What should be done about the notice?
The first four IRS notices/letters above are requesting that you pay the amount of taxes owed in addition to any interest and/or penalties that may have been added. Ignoring these notices related to back taxes will result in enforced collection actions including wage garnishments, the clearing of bank account balances, tax liens and much worse. If unable to pay in full, other options to avoid enforced collections include payment plans (installment agreements) or other collection alternatives (i.e., offer-in-compromise, currently-not-collectible, etc.).
The last two IRS notices/letters are requesting that you go ahead and submit unfiled returns that are past due. Failure to file these returns will result in the IRS calculating a return for you, often to your disadvantage. Once prepared and a balance is assessed you will begin to receive the IRS collection notices listed above which will result in enforced collections if not properly addressed.
If you or someone you know needs help understanding an IRS notice or if they have unfiled returns, contact us so that we can help them resolve the issue. We can be contacted by phone at (919) 792-8511 or you can email us directly using this link.
Lauren Massie, CPA, PLLC serves clients in North Carolina throughout the Greater Triangle Area including cities such as Raleigh, Wake Forest, Cary, Durham, Chapel Hill, Hillsborough, Youngsville, Franklinton, Garner, Knightdale, Zebulon, Angier, Clayton, Louisburg, and Wendell.