If Taxes Remain Unpaid, What Do Those Upsetting IRS Notices Mean?

Westport CT

03 June, 2022

12:08 AM

Description

When a taxpayer owes money to the IRS and it remains unpaid, the IRS will begin sending notices to initiate the collection process. These various notices are reminders that the taxpayer still has an outstanding balance and they are mailed out every few weeks. These notices are sequentially numbered and the tone of each notice becomes increasingly more strongly worded. The first notice the IRS will mail out is Notice CP-501 ( the notice number can be found in the upper right hand corner of the notice). This notice is relatively benign in its tone and states that IRS records indicate there is a balance owed and to pay it by the date stated to avoid additional interest and penalty charges. A coupon is provided to remit payment.If payment is not received, then several weeks later the taxpayer will receive Notice CP-503 (there is no Notice CP-502). This notice states that the taxpayer has previously been reminded that there is a balance owed and if payment is not made by the date stated, additional interest and penalties will apply. The tone of this notice is a bit firmer. A coupon is provided to remit payment.If payment is still not received, then several weeks later the taxpayer will receive Notice CP-504. This notice has a serious tone and states that it is a notice of intent to levy the state tax refund and other property if the balance owed is not paid by the date stated. A coupon is provided to remit payment.If payment is still not paid, then several week later the taxpayer will receive Notice LT11, or Notice LT1058 . This tone of this notice is harsh and states that it is the IRS’s intent to seize the taxpayer’s property or rights to property if the amount owed is not paid immediately. A coupon is provided to remit payment. Included with this notice is Form 12153 which gives the taxpayer 30 days from the date of Notice LT11 or Notice LT1058 to file an appeal. If payment or other arrangements have not been made, then it is crucial for the taxpayer to file for the appeal on Form 12153 or lose valuable rights that filing the appeal will give them, and IRS will now be free to seize assets.These IRS notices should be taken seriously and retaining professional help is recommended.Dealing with the IRS presents various challenges. If you or someone you know has an unpaid IRS income tax liability and needs assistance in resolving it, please feel free to contact me, Steven R. Diamond, CPA, at 203-221-2700, or at my email [email protected] R. Diamond, CPA191 Post Road W.Westport, CT 06880