Receive a Certified Letter or Notice from IRS?
Whenever you are not in compliance with the Internal Revenue Service, they are required BY LAW to notify you by mail of any actions they are intending to take against you. We have included a summary of the types of notices the IRS will issue along with samples of these notices to help you better understand what it all means in a way you can understand.
Click the following links to jump to a Notice example:
Click on they Notice number you received from the IRS for more information on what it means and what you can do to address that specific notice.
Please feel comfortable reaching out to us if you have any questions or want to get clarification on your specific notice and what needs to be done to properly resolve the issue and avoid collection efforts.
Types of IRS Collections Notices
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CP14: Notice of Unpaid Taxes
This is one of the first Notices you will receive from the IRS before they place you into collections and begin making attempts to recover the balance(s) due. This is really just a reminder that you owe the IRS and to address the pending issues before the situation escalates. This Notice will indicate the Tax Year(s) in question and with the request for full balance to be paid immediately. It is highly advised that you are proactive with this type of notice and get advice on what your options are in dealing with the balances if you unable to pay the full amount owed by specified date. Call or email us for additional information to ensure you are handling this properly.
CP-504, LT-11 or LT-16: Notice of Intent to Levy
This is one of the first notices you will receive from the IRS once you have officially been placed into collections and typically the IRS will request the full amount to be paid by a specified date in order to avoid collection efforts. This CP504 Notice is also commonly referred to as a LT-11 or a LT-16 Notice. These are the same notices but the IRS will code them differently. Once you receive this Notice, you are now in a position where you must start addressing these tax balances if you are not able to pay the balance in full. You have a lot of options at this point since you are still early in the process so please contact us if you want to better understand what you can do and to find the best solution to your pending issues.
1058: Final Notice of Intent to Levy
If you have received a Final Notice with an Intent to Levy Notice, then you already should have received the CP-504, LT-11 or LT-16 notice from the IRS and failed to take appropriate action to protect from collection efforts. This REALLY is your Final Notice and it is essential that action be taken immediately if you want to prevent property loss or garnishments to wages. Normally, when someone has progressed to this stage of collection, it is indicative of the fact they cannot pay the amount that is owed and they are unsure as to what they can do or how they should proceed. You must always remember that you have rights when it comes to the IRS and there is always a solution to your problems. You just need to be sure you take the time to understand your options. Not only can we stop any collection efforts but we will determine the specific outcome to your issues so you no longer have to live in fear of actually being garnished or falling susceptible to asset seizure if you just reach out and let us know what’s going on. Again, this really is a FINAL NOTICE OF INTENT TO LEVY, so be sure you take necessary action IMMEDIATELY!
668-W: Notice of Levy on Wages, Salary, and Other Income
As we alluded to above, the IRS will send out warning shots and if appropriate action is not taken to pay the balance that is owed, the will garnish wages or begin seizing assets. Now, although the IRS has already warned you multiple times, this can all still be fixed but it is much more difficult to release a garnishment/levy than it is to prevent one from ever happening. We can get the garnishment released within 24-48 hours and always strive to have a release issues to an employer prior to next paychecks being issued. You are now at the mercy of the IRS and cannot survive if you remain under garnishment so PLEASE CONTACT US RIGHT NOW IF YOUR EMPLOYER RECEIVED A LEVY ON YOUR WAGES FROM THE IRS!
CP90: Intent to Seize Assets or Right to a Hearing
Similar to the Final Notice with an Intent to Levy, this is a notice the IRS will issue to any taxpayer who has failed to respond to any of the previous requests by the IRS to pay off the balances owed. However, this notice is to indicate they are going to actually pursue aggressive collection through the seizure of physical assets. This can include vehicles, boats, motorcycles, rental property, retirement accounts, or even your primary residence. They do not issue a hard deadline which is very scary. TO ensure you are not blindsided and fall vulnerable to having your assets taken away from you, please contact us today so we can determine what is in your best interest to prevent collection and ultimately resolve the pending issues at hand.
668-D: Release of Levy/Release of Property from Levy
This is one of the few notices you will receive from the IRS that is actually positive. Once you have been levied by the IRS and either your wages were garnished or your bank account was frozen, this is the notice you will receive as official documentation that you are no longer under collections and the garnishment and/or bank levy has been released. You are now free from levy but you must perform proper resolution work to ultimate protect from the IRS coming back and hitting you with a future garnishment/levy that will require you to go through this entire process all over again. Stop the agony and make sure you receive full and complete resolution to your tax debt. Now that you are no longer under enforcement, we can start focusing on settling your debt through an Offer in Compromise, establishing a payment plan that works within your budget and goals, or a Currently Not Collectable Status if you just can’t afford to make any payment to the IRS. Call or e-mail Colonial Tax Consultants– Let’s spend some time to discuss what is best for you and your situation.
CP-523: Intent to Terminate Installment Agreement
If you ever agreed to an Installment Agreement and have received this notice from the IRS, then it means you have either missed a payment or you accrued a balance due on another tax year that was not included within this Installment Agreement. Sometimes, this isn’t necessarily a bad thing as it is warning that you must include all years together to avoid future issues or even negotiate a payment plan that is less than what was originally agreed to by the IRS. Remember, you are only required to pay whatever you show as an ability to pay without causing hardship. Perhaps, your collectability has gone down and we can now negotiate a settlement, get into Not Collectable Status or decrease your monthly payment to the IRS. This is where it really pays to be smart and to truly understand what your options are in getting out from under this debt.
Form 668(Y): Notice of Federal Tax Lien
The IRS will almost always file a Federal Tax Lien against you if you have unpaid taxes that have not properly been addressed. The IRS will file this lien to put on notice to other creditors that you may owe money to that the United States Government has a claim against all property of the taxpayer. Even if you do not own any property, the IRS will still attach this lien to your SSN as indication that you owe them money and to protect their ability to collect against you.
If you owe less than $25,000 to the IRS and allow us to successfully negotiate a payment plan that will satisfy the balance in full over time, we can file for a Withdrawal of Federal Tax Lien once probationary payments have been made. Otherwise, this lien will not go away until the balance is paid or forgiveness is granted and you are relieved of the balances through Offer In Compromise, 10-Year Collection Statute Expiration, or other method pertaining to your particular case.
Form 668 (Y) Example
Form 10916: Withdrawal of Filed Notice of Federal Tax Lien
The IRS has a process by which we can successfully “withdraw” a Notice of Federal Tax Lien even if you still have a balance due (see Form 668 (Y) above). If proper steps are taken and the IRS does issue the Withdrawal of Federal Tax Lien, then it is as if the Lien was never filed. This can be extremely beneficial when conducting credit repair or in process of purchasing/selling of assets and the lien has interfered with your ability to do so. In 2011, the IRS expanded the situations in which a taxpayer can get a tax lien withdrawn and to help prevent a taxpayers purchasing ability. Also, as of 2011, it was announced the Credit Reporting Agencies would remove a tax lien from a credit report if the IRS has agreed to withdraw it. Through this method you no longer have to wait 7 years to have a lien off of your credit report. Let’s discuss your issues and see if you qualify for a Withdrawal of Federal Tax Lien!
Form 10916 Example
Form 668 (Z): Certificate of Release of Federal Tax Lien
Section 6325(a) of the Internal Revenue Code enables us to negotiate for a release of Federal Tax Lien after a liability becomes fully paid or legally unenforceable. Once a balance on account effectively runs its 10-Year Collection Statute, we can not only write-off the balance due but can also obtain this Certificate of Release of Federal Tax Lien that you can provide to any credit bureaus, County Recorders, or lenders who still have this lien on file as being attached to you.
Form 668 (Z) Example
Offer in Compromise(OIC) Acceptance Letter
This is the best kind of Notice you can ever expect to receive from the IRS. This notice is official documentation that the IRS has agreed to reduce/eliminate the balances due on your account due to either a Doubt as to Collectability or a Doubt as to Liability. Once this settlement is agreed upon by the IRS, you are required to file and pay taxes on time for a minimum of the next 5 years in order to keep this approval intact and to avoid being hit with the full balance all over again. To fully discuss your candidacy for this particular program, please contact us as this is something that needs to be discussed before anyone proceeds with this particular resolution strategy.
Offer in Compromise (OIC) Acceptance Letter Example
Types of IRS Audits
CP2000: Proposed Changes to Form 1040
If you received this notice from the IRS, it doesn’t mean you absolutely owe the tax that is listed as an Amount Due. However, this notice is making you aware that the income and/or payment information that was submitted to the IRS by employers, banks, trade accounts, etc doesn’t match the information you reported on your tax return. The IRS has simply issued a proposed assessment of what you owe due to the failure to include or match this information. You will need to file an amended return, accept the proposed changes, or complete the response form to contest the changes along with adequate documentation to support your claim. Often times, you just didn’t receive all of your tax documents in the mail and filed your Return without making sure you had included everything. This can all be addressed but it needs to be done properly.
4549: Income Tax Examination Changes
If you are audited, the IRS will issue a Form 4549 to disclose what you owe in additional taxes and what was disallowed on the Tax Return in question. They will also include what you will owe in penalties and interest in accordance with this additional tax assessment if you are unable to defend against these changes. This form serves as a 30-day notice to respond to the IRS with your defense in order to prevent the actual assessment from being issued against you. The good news is, this form clearly indicates where changes were made and where you need to obtain documentation to support your defense. The burden of proof will be on you to prove your figures.
4549 Example_Page 2
531-T: Notice of Deficiency
If you get to a point where you receive a 90-day Notice (or letter) of Deficiency, your Audit is really complete. At this notice stage, the IRS is offering you 90 days to go to Tax Court, if you want to dispute any items in that different venue but as far as negotiating with IRS Examinations is no longer an option. Should you want to keep up the fight and proceed to take your case to Tax Court, you can expect to pay what you owe the IRS or plan to negotiate with your tax professional on what you owe thru the IRS collection branch. Now, if you do not want to go to an actual Tax Court, you do still have the option to file an Audit Reconsideration, which essentially starts the process over. This is something that you would need to discuss with a trusted tax professional if you get this far along in the audit process.