Unpaid Taxes WILL continue to follow you via IRS Notices. Here’s what you should know and what to do next.
You’ve grabbed your mail from the box and are flipping through the stack of ads, bills, and magazines until it catches your eye— that white envelope with the cellophane window that shows that most dreaded Sender address: you got a notice from the IRS.
First step: Don’t panic. But your second, immediate step is to OPEN THAT MAIL! Not opening your IRS notice does not protect you from what’s waiting inside. Avoidance will only lead to a harder row to hoe, as the time period you have to respond begins with the letter date, NOT the date you received it!
Your next important step is to reach out to IRS Hostage Negotiators. No matter what the notice is, we can help you figure it out and get you on the path to reconciliation faster than you’ll be able to on your own. But even if you decide not to use our help, you should know what the different notices mean and how they will affect you in the long term.
Here are the most typical IRS Collection Notices for Unpaid Taxes:
CP14 Balance Due – This one will come in via snail mail and is usually the first notice sent if your taxes are filed and there is still an outstanding balance.
CP 501 – This one also comes via regular mail but is very important! The 501 is a 10-day demand and lien warning and is typically the first or second notice you’ll receive if you have an overdue account.
CP 503 – Now they want you to know it’s urgent (although still coming through snail mail)! This is your second notice that you have not paid your account balance.
CP504 – Here’s one so important the IRS will send it via Certified Mail. This informs you that if the account is not paid in full, the IRS will start searching for assets to levy. The first is typically your state tax refund. (Learn more about levies here.)
CP523 – If you’ve already set up an installment agreement with the IRS you do not want to see this in your mailbox. This is the Intent to Terminate Your Installment Agreement and Seize Your Assets. If no action is taken with this one, they can levy your wages, garnish your bank account, and seize other assets.
CP 90 – Getting even scarier, this letter –the Intent to Seize Assets and Notice of Your Right to a Hearing— notifies you that a levy WILL be filed against assets including bank accounts, wages, recurring 1099 income, retirement accounts, pensions/benefits, real estate, cars, motorcycles, boats, virtual currency, stocks, bonds, etc. A similar notice, the CP 297, is sent to your business.
Ok. Now that you’ve been warned repeatedly and a levy has been put against you, you’ll receive one of two FINAL notices. These are the big kahunas of IRS notifications. You do NOT want to find this little Certified Mail card in your stack.
LT 1058 – Final Notice of Intent to Levy and Notice of Your Right to Hearing- now the IRS has made numerous attempts to collect your payment. If no action is taken within 30 days they have the right to levy or seize assets.
LT 11 – Intent to Seize Your Property or Rights to Property – the IRS, due to no payment being received, intends to seize assets. They may also place a lien on your property.
It is extremely important you pay attention to these final notices. THIS IS YOUR LAST CHANCE. In 30 days, you’ll be faced with the execution of a levy and you will lose your ability to appeal with a Collection Due Process (CDP) Hearing. By not responding to this letter, you’re giving up your right to a CDP hearing and you’re exposing yourself to a levy of your accounts and/or assets. Once you’ve received this letter, you need someone to help you. Even if it’s just a conversation over the phone so you know what’s up and what to expect.
Text IRS to 21000 and we’ll send you our digital business card. Keep it and be ready to reach out when receiving one of these letters… IRS Hostage Negotiators is here to help you get the collection activities to stop and get your tax debt situation solved.