Did you know that more than half of America pays taxes and receives an IRS notice about the status of their tax account? Some people receive these letters to let them know they are due a refund, whereas others receive an IRS notice because they owe a debt.
Although the IRS does its best not to make any mistakes, there is the chance that the information they sent you is wrong or you have additional legal options you can use to dispute what they’ve sent.
Please continue reading below if you’ve recently received a notice from the IRS and need help understanding what to do next. We will cover what you need to know about your IRS notice and who you can contact to help you better understand what next steps you can take.
Table of Contents
What Is an IRS Notice?
Each year, the IRS sends notices to Americans if there are any issues or updates with the taxes they file. If the IRS sends you a notice, it typically means that they need to confirm the information you listed on your annual tax report, or you may owe taxes.
Before you do anything, it is imperative that you review the information on the paper and verify if the letter really came from the IRS. There are some people who try to scam innocent people of their data by sending out letters that look official. If you are unsure if the letter you received was valid, visit the Internal Revenue Services website and call them.
What Should You Do if You Receive an IRS Notice?
As mentioned above, you should first ensure that the letter comes from the IRS. No one from the IRS will ask for you to give them your personal information or banking information to verify you.
Review the Information in the Notice
Each IRS letter clearly states what it is for and what it needs you to do. For example, if you’ve received a notice CP14 First Notice of Balance Due, this means that there is a balance on your unpaid taxes that you owe. If you agree to the amount of the CP14, you can arrange to make a one-time payment online or set up a payment plan.
Dispute the Notice
If you disagree with what is on the notice and wish to dispute it, you must send the IRS a letter explaining why you’re disputing it. Once you draft that letter, you can send it to the address on your IRS notice. Be sure to include any information that supports why you dispute the notice sent to you.
Take Action
It is imperative that you take action after reviewing what the notice is asking you for. As mentioned earlier, the letter may request payment because you owe taxes.
If you agree with the letter, you can take action by sending them the payment or by creating a payment plan online. If you disagree, don’t just ignore the notice. Reach out to the IRS for more information.
What Should You Not Do if You Receive an IRS Notice
If you receive an IRS notice, it is crucial that you don’t ignore the notice at all. If the letter they send you is about collecting back taxes, the IRS will continue to send you more letters until you respond.
The longer you ignore the IRS, the more they will want to take serious action against you. This includes the possibility of them garnishing your wages or seizing your assets to take care of the debt.
Dont Throw Away the Notice
Although it may seem tempting to just throw away the notice after reading it, it is crucial that you don’t. Keep the letter for your records, especially if the notice calls for you to adjust something on your taxes. You should keep your records for about three years just in case you get audited.
Dont Panic
Once you receive the notice, don’t panic. The IRS typically contacts taxpayers via mail, and all you have to do is read the notice carefully. Again, as mentioned earlier, double-check to ensure that the letter you received actually came from the IRS.
Possible IRS Notice Meanings
The most common reason why the IRS contacts you is that you have a balance due.
Other reasons why you may receive a notice:
- The IRS needs additional information
- They need to verify the information you submitted
- You are owed a larger or smaller refund
Each letter the IRS sends you has a specific number and letter attached to it. For example, if you’ve received a CP11, there are changes to your Form 1040 and a balance you owe.
When you receive the notice, there will be instructions on paying the balance owed. You can dispute it if you disagree with what the IRS sends you.
CP14IA Notice
If you’ve received a CP14 notice that tells you about a debt you owe and you’ve set up an installment agreement plan, you’ve probably received a CP14IA. This notice is sent to you to remind you about the payment plans you’ve created and how much you owe for each installment.
C75 Exam Initial Contact
If you’ve received this notice from the IRS, this means they need you to provide them with additional information about your tax return. When they send this notice, this means they’re looking for information related to the Earned Income Tax Credit, American Opportunity Tax Credit, or Child Care Tax Credit. There should be instructions about what information you must provide for this notice.
CP501 Reminder Notice
If you’ve received a reminder notice from the IRS, they’re just reminding you that you have a balance due that you haven’t paid. If you continue to ignore this notice, the IRS will send you CP503, which reminds you of your debt.
CP504 Final Notice
After sending you the CP501 and CP503 notices, the IRS will need to take action against you. The CP504 is the final notice the IRS sends before they start searching for your assets to levy. The CP504 is an intent to levy.
CP523 Intent To Terminate Your Installment Agreement
If you set up an installment agreement with the IRS, but you don’t make good on your promise to pay, the IRS will send you this letter. When you receive a CP523, the IRS lets you know that they will terminate your installment payment plan if you don’t speak with them about resolving the debt.
If you refuse to respond to this letter, the Internal Revenue Service will move forward and garnish your wages or seize your assets to recoup your debt. It is imperative that you take this note seriously because the IRS will not send you another warning.
CP90 Intent To Seize Assets
This letter tells you that the IRS will put a levy against any real estate, bank accounts, or any other assets that they are allowed to put a levy on. If you’ve received this notice, it is crucial that you take action right away. If you are unsure of what steps you should take, you can reach out to a reputable attorney for more information.
What Is a Tax Attorney?
A tax attorney is a professional that can assist you if you have any issues with taxes or the IRs in general. These lawyers are well-versed in state, federal, and local tax codes that you may or may not have abided by.
Not only do they help you when you’re in trouble with the IRs, but they can help you with vital tax advice. When you partner with an attorney before receiving a letter from the IRS, the lawyer can help you avoid getting to this point.
Legal Research
Attorneys have the knowledge and the resources to conduct needed legal research. They must know about the up-to-date tax laws and policies that change often. The correct tax attorney will know where to find this updated information so they can apply it to your case.
Handles Tax Dispute
Do you disagree with the letter sent to you by the IRS? Want to know more about what the Internal Revenue Service needs from you? If so, you can speak with a tax attorney to learn more about your legal options.
Instead of you fumbling on the internet trying to find an answer to what you’re going through, you can depend on a lawyer to help you make it make sense. The attorney will also speak with the IRS and negotiate on your behalf.
Represents You in Court
If you’ve received a notice to appear in court for your tax situation, it is best to speak with an attorney. Unless you’ve had years of experience practicing law or have courtroom experience, you may want to leave this job to the professionals.
When you’re in a tax courtroom, you must be able to understand the legal codes in your case and how to raise the proper defense. If the other attorney, who represents the IRS, knows that you are going up against them without help from a tax lawyer, they will see you as vulnerable.
Working with a tax lawyer who has courtroom experience is key to winning your case or having the case provide you with favorable terms. It helps to work with a local tax attorney because they are well aware of how those courtrooms work. They have experience dealing with other lawyers and are familiar with the judges and how they rule.
Advises You About Your Legal Rights
As an American citizen, you have rights, especially regarding taxes. There are several different laws that can work in your favor or that your attorney can use to lessen your burden. Regardless of your situation and the type of help you need, the attorney can give you all of your options.
How To Find the Right Attorney
When you first search for an attorney near me, you may end up with an overwhelming amount of attorneys who pop up. Make sure you first double-check that you’re looking for a tax attorney. There are several different branches of law that an attorney can practice.
Once you find a few you like, please look at their reviews. You can use websites like Better Business Bureau or Google Reviews to see what other people have to say about their time with an attorney.
Pay particular attention to the reviews that talk about communication. You want to ensure that you work with an attorney who communicates with their clients and keeps them up to date on what is going on with their case.
Experience in Tax Law
Because you’re going up against a government agency, it is best to partner with an attorney with tax law experience. This includes having experience negotiating with other tax attorneys and experience in the courtroom.
When you speak with your lawyer, ask them about their experience handling cases similar to yours and what strengths and weaknesses your case has. If an attorney does not answer your questions or is quick to make you sign a contract with them before they give you more advice, you may want to see counsel elsewhere.
Help With Owing Taxes
If you’ve received an IRS notice and aren’t sure what to do about it, remain calm. The first thing you want to do is understand what the letter means and take some form of action. Do not throw away the notice.
If the IRS sends you information you wish to dispute, you may want to speak with an attorney to learn more about your legal options and how to best proceed. If you’ve recently received an IRS notice and want to know what to do next, contact us. We are here to answer any questions or concerns you may have about your notice.
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