Resources

Tax Defense Resources

IRS Letters IRS Letters: Understand What Your IRS Notice Means & What to Do

Letters from the IRS describe why they are contacting you and include guidance on how to handle the issue. The IRS usually sends out letters or notices if:

  • The IRS requires additional information regarding your tax return
  • There was an error or omission on your tax return, and an additional tax payment is required
  • There was an error, and you are owed a greater refund

The IRS assigns a number to every notice that leaves their office. Some notices come with a CP designation, which is at the top or the first page of the notice. A typical notice or letter will require some action on your part. After reviewing the information provided by the IRS, it is essential to compare the information received from the IRS to the information that you provided to them during the period in question. If there is a discrepancy, then this should be brought to their attention. When an error has been made and additional payment is required direct correspondence and payment can be submitted directly to the address on the notice.

Different Types of Letters from the IRS

Some of the more common letters from the IRS include:

CP 88 – Delinquent Return Refund Hold

This notice is used to notify the taxpayer that the IRS is holding their tax refund because they have unfiled tax returns for a different year.

CP 501 – Reminder Notice – Balance Due

This is the first notice that you will receive from the IRS if you have an overdue account.

CP 503 – Second Request Notice – Balance Due

If you have not paid the balance of your account you will receive a second notice.

CP 504 – Final Notice & IRS Intends to Levy – Balance Due

If the amount is not paid in full this is the 3rd and final notice before the IRS gets serious and start searching for assets to levy.

CP 523 – Intent to Terminate Your Installment Agreement & Seize Your Assets

This is the notice that the IRS sends prior to terminating your installment agreement with the IRS. If no action is taken, the IRS may levy your wages, garnish your bank account or seize other assets. Understand the details of this notice and what actions can be taken to fix the problem.

CP 90 – Intent to Seize Assets and Notice of Your Right to a Hearing

This IRS letter is a notification that a levy will be put against assets and any retirement benefits, salaries, real estate, automobiles, bank accounts etc can also be included in the levy.

CP 297 – Intent to Seize Assets and Notice of Your Right to Hearing

This notice is similar to the CP 90, but it is sent to your business. This is a notification that due to unpaid taxes the IRS intends to levy assets if no actions are taken.

LT 1058 – Final Notice of Intent to Levy and Notice of Your Right to Hearing

The IRS has likely made numerous attempts to collect by the time the taxpayer receives this notice. If no action is taken within 30 days, the IRS has the right to levy or seize assets.

LT 11 – Intent to Seize Your Property or Rights to Property

The IRS hasn’t received any payment for overdue taxes and they intend to seize assets if no action is taken. The IRS may also place a lien on your property.

CP 22A – Notice of Change(s) to Your Tax Return

Based on the information you provided the IRS, your tax return was changed and you now owe money

CP 3219A & Form 5564 – IRS Notice of Deficiency

Understand what the IRS notice of deficiency means. Should you sign the form 5564 that is attached to agree to the new assessment? Know what to do if you do not agree with the notice and what to do if you cannot pay the balance that is now due.

CP 508c – Possible Revocation or Denial of Passport

This letter will be sent to taxpayers starting in January 2018 if the IRS has determined that their account is “seriously delinquent”. The IRS has provided that information to the State Department. Generally, the state department will not renew your passport or issue a new passport after receiving this certification. They may also revoke or place limitations on your current passport.

CP 2000 – Notice of Underreported Income

The IRS will send this letter when their records don’t match what you reported on your tax return. The letter will contain IRS proposed changes. It is not an audit. If you agree with the proposed changes or disagree, mark the response form accordingly and send it back to the IRS. Read more about this letter and what to do by utilizing the link above.

IRS Letter 1153 & Form 2751: Proposed Assessment of the Trust Fund Recovery Penalty

The IRS sends this letter to individuals about the Trust Fund Recovery Penalty. Typically, the IRS sends this letter when a business has refused to pay the payroll taxes, and the IRS has decided to hold you responsible for the debt. Form 2751 is an enclosed form agreeing to the assessed amount.

IRS Forms IRS Tax Debt Relief Forms

Common tax debt relief filings and forms.

Tax Payment Options/IRS Installment Agreements

Guaranteed Installment Agreement

  • Best option if you owe $10K or less
  • IRS Form 9465 Installment Agreement Request

Streamlined Installment Agreement

  • Best option if you owe between $10K and $25K
  • IRS Form 9465 Installment Agreement Request

Verified Financial Statement Installment Agreement

  • Best option if you owe over $25K
  • IRS Form 9465 Installment Agreement Request
  • Appropriate Form 433: IRS Form 433-A or IRS Form 433-F: Collection Information Statement for Wage Earners and Self-Employed Individuals or IRS Form 433-B: Collection Information Statement for Businesses

Partial Payment Installment Agreement

  • IRS Form 9465 Installment Agreement Request
  • Appropriate Form 433: IRS Form 433-A: Collection Information Statement for Wage Earners and Self-Employed Individuals or IRS Form 433-B: Collection Information Statement for Businesses

IRS Short-Term Payment Extension Due to Undue Hardship

  • Best option if you can make payment within 6 months after the due date of your tax return
  • IRS Form 1127 – Application for Extension of Time for Payment of Tax Due to Undue Hardship

Offer in Compromise

  • IRS Form 656 Offer in Compromise Form
  • IRS Form 433-A Collection Information for Wage Earners and Self-Employed Individuals or
  • IRS Form 433-B Collection Information Statement for Businesses

Penalty Abatement

  • IRS Form 843 Claim for Refund and Request for Abatement
  • Written Petition to strengthen your argument and provide proof

IRS Hardship/Uncollectible Status

  • IRS Form 433-A or IRS Form 433-F Collection Information for Wage Earners and Self-Employed Individuals or
  • IRS Form 433-B Collection Information Statement for Businesses

Innocent Spouse Relief

  • IRS Form 8857 Request for Innocent Spouse Relief

Collection Due Process Hearing

  • IRS Form 12153 Request for a Collection Due Process or Equivalent Hearing

Withdrawing an IRS Tax Lien

  • IRS Form 11277 – Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien