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IRS Collection Letters and What They Mean
The IRS Collection letters will begin being seen in mailboxes across the country. Here is a a brief explanation on what those letters mean.
So you have recieved a notice from the IRS? You are probably wondering why you got this letter, what it means or what is going to happen because of the situation that you are in.
I am going to explain to you what most IRS letters mean and the reason that they are sent.
CP14 – BalanceDue
This is normally the first collection letter that you will recieve. Normally, the IRS will send you this notice if you have a balance that is owed from a tax return. This bill will normally include the amount you owe minus what you have paid and any penalties and interest that have been added as well.
CP501-Balance Due (1st Reminder)
This will be the first reminder that the IRS sends to you expressing that you have an upaid balance. This will be similar to the CP14.
CP503 – Balance Due(2nd Reminder)
This is the 2nd notice that the IRS will send to you on an oustand balance owed to the IRS. It will look similar to the CP501 and is usually send 30days from the notice of the CP501.
CP504 – Balance Due (Last Warning)
This notice is telling you that the IRS plans to issue a levy against you still have a balance due on one of your tax accounts. This also lets you know that they will be searching for assets that you have in your name and may file a Tax Lien to secure the debt. This will also give you the notice of the right to a hearing before the IRS Office of Appeals. If they dont recieve communication they they may seize ("levy") any of the following: Wages, real estate commissions, and other income.Bank accounts,Business assets,Personal assets (including your car and home)and Social Security benefits.
CP90/CP297 – Final Notice of Intent to Levy and Notice of Right to Hearing
This notice is telling you that the IRS intends to issue a levy against any federal payments due you, such as contractor/vendor payments, OPM retirement benefits, SSA benefits, salary, or employee travel advances or reimbursements because you still have a balance due on your tax account. Property, or rights to property, such as real estate, automobiles, business assets, bank accounts, wages, commissions, and other income are also subject to levy. It is also telling you that they may also file a Federal Tax Lien, if they have not do son.
If you do not agree with the proposed action, you have the right to file an Appeals Collection Due Process (CDP) hearing request. Your request for a CDP hearing must be filed within 30 days of this notice for full CDP rights.
CP523 Defaulted IRS Installment Arrangment
This notice is telling you that the IRS intends to terminate your installment agreement and seize (levy) your wages and/or bank accounts if you take no action. The notice tells you why the IRS plans to do this as well.
So if you have any gotten any of the above letters the time to act is Now. Do not let your self continue to wait to get more of these letters and put youself in a worse situaiton.
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