Mar 5, 2009

You Have Mail...IRS Certified

If you have received certified mail from the IRS, you more than likely owe taxes and the IRS is about to begin enforcing collection of those taxes. You also more than likely have received other IRS letters that were not certified regarding your tax liability.

What most people do not understand is that the IRS letter cycle is their warning system and they are trying to warn you that you need to resolve your tax issue or they will begin enforcement of that liability through liens and Levies. And the letters that they send just before they begin issuing liens and Levies come certified.

Why? Because the IRS is required to by law. DO NOT think that by not going to the post office to sign and receive your certified mail is going to stop them from enforcing collection of your past due taxes. That is irrelevant. The fact that they sent the notice via certified mail fulfills their judicial obligation before they can begin levying your assets, such as your wages and bank accounts.

Here is how the IRS letter cycle normally works when you owe taxes.

First Letter- Notice of Balance Due (Letter code CP14 or CP11, you can find these codes normally in the top right corner or bottom right corner of the notice) This notifies you that they are attempting to collect past due taxes.

Second Letter- 1st Payment Notice (CP501)- "You need to pay your balance". If you owe for multiple years the IRS can skip this notice and move to the third letter

Third Letter- 2nd Payment Notice (CP503)- "You need to pay your balance immediately"

Fourth Letter/Certified Mail-Notice of Intent to Levy (CP504) "If you do not pay your balance, enforced collection will begin"

Fifth Letter/Certified Mail*- Final Notice of Intent to Levy and Your rights to a Hearing (CP90, CP91, CP92, CP242, L1058, L11, L1085) "A Levy is Imminent"
*if no CP504 issued

The above list is just a fraction of all the notices and correspondence that the IRS issues for every possible tax issue and it is not exhaustive, however that is the normal collection notice cycle.

The point is this. If you have received certified mail from the IRS, you have a limited amount of time to react before they begin to levy your assets. This means you need to react now and be proactive in resolving your tax situation. Obviously it would be in your best interest to be proactive from the first letter you receive to give you and/or your representative the most amount of time to resolve the issue since dealing with the IRS on any tax issue is time consuming and time is of the essence.

If you do not understand any notice or letter that the IRS has sent you, then seek an expert Tax Professional to help you.

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