Did You Get A Letter From The IRS? Don’t Panic!

Alarmed about that letter from the IRS?

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No one relishes the thought of getting a letter from the IRS. Here is a quick guide to the most common reasons for a notice from the IRS, and steps you can take.

  • If you owe a past due balance on your taxes.
  • If the IRS intends to levy certain assets for non-payment of delinquent taxes
  • If you default on a payment agreement or installment plan.
  • If you have an unclaimed tax refund

Other reasons the IRS may send you a notice:

  • Incorrect or missing information  on your tax return. The IRS will send you a letter requesting clarification or supplemental documentation.
  • Notice that your return has been selected for an audit

Regardless of the reason for the letter, it is important that you respond right away. Setting the letter aside and hoping the IRS will forget isn’t realistic no matter how badly you want the matter to go away.

All IRS correspondence lists an 800 number and address for your written responses. Whenever you call the IRS, keep a log of when you called, who you spoke with, and the outcome/response.

If you correspond with the IRS by mail, be sure to send your letter via certified mail with a return receipt.

Most IRS notices have a clearly stated deadline. Don’t ignore it. If you can’t provide the needed information by the deadline, call the IRS and explain your situation. Chances are, you’ll get additional time to comply.

Since mail is the IRS’s first line of communication, don’t ignore any correspondence. Chances are, it’s a request for clarification on missing or incorect items on your tax return.

If the letter is a notice to pay past due taxes, or is a notice of default, don’t ignore it. Doing so will bring about legal and financial consequences that will be harder to resolve than the original problem.

If you’re facing unpaid back taxes, a pending tax lien or other tax-related hardship, we have qualified tax pros on staff who can help.

Get started today by choosing any of the options under the “Contact Us” link on your website. Whether you choose to chat, email, or call, we can help.

 

The New Tax Year Resolution You Must Make Right Now

calculator-1019743_1280Ignoring that past due tax debt will get your new year off to a stressful start

2015 will be history in a matter of days. If looking back on 2015 also includes an outstanding tax debt, addressing that tax debt needs to be at the top of your New Year’s resolutions list.

Penalties and fees

If you have not  yet paid your 2014 taxes, you’ve been racking up penalties and fees for each month of non-payment. The IRS assesses a non-payment penalty of 1/2 of 1 percent of the balance for each month after the initial due date. It may not sound like much, but it can penalties can add up to as much as 25 percent of the balance due.

That’s a lot if you’re on a tight budget, and penalties can add up quickly, not to mention past due notices from the IRS.

Don’t panic, and don’t ignore the IRS

Don’t assume the IRS will forget about those outstanding taxes, because their role is to collect tax payments from citizens. If you’re ignoring their written notices in hopes the IRS will forget and move on, it will never happen.

The IRS will become more aggressive with each passing month of non-payment. Regardless of where you are in this collection cycle, the IRS won’t forget. If you are facing asset seizure for non-payment of past due taxes, you need to take action immediately to protect your bank account and other assets.

Your best defense against the IRS

The bad news is you owe back taxes. The good news is that there are tax professionals who can help you. A qualified tax pro can determine if you’re eligible for an installment agreement, Offer In Compromise or Currently Non-Collectible status. A tax pro such as an Enrolled Agent or tax attorney can represent you in negotiations with the IRS.

One key advantage to hiring a tax pro: they know the complex IRS tax code inside and out, so you won’t have to. A qualified tax pro will also ensure your rights are upheld throughout the collection proceedings. They will also explain each step to you in terms that you can understand.

You won’t hear jargon or “legalese,” but you will hear an honest assessment of your financial circumstances and your options. Your tax pro can work with you in arriving at a payment arrangement you can live with over time.

If you’re facing 2016 with an outstanding tax bill, now is the time to take charge and take back your life. We have qualified tax pros on staff who can help you sort out your options, negotiate on your behalf with the IRS, and advise you every step of the way. Even better, they can translate that complex IRS jargon that might be difficult to interpret and understand.

If you’re ready to face 2016 with a clear plan of action, give us a call today at (888) 224-3004. You can also chat with us by clicking the white “Start Chat” button at the top of our homepage.

Either way, you don’t face to face past due taxes alone. We can help.

 

 

 

The Whys and Hows of Reaching The IRS

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If you’re like most people, the thought of contacting the IRS and getting through to a representative isn’t something at the top of your “to do” list. After all, who has all that time to be on Eternal Hold? The IRS is responsible for enforcing tax laws and codes, processing tax returns, and answering tax-related questions. If you’ve ever tried to reach the IRS by phone, you know their customer service department is busy.

Why It’s So Hard To Get Through

Unfortunately, the IRS, like most government agencies, has endured a series of funding and staffing reductions in recent years. The end result? Long wait times on the phone and slow response rates for written correspondence. According to the Government Accountability Office, telephone wait times so far this year have been up to one hour. Most people don’t have that degree of free time, so if you’ve waited on hold only to hang up, you’re not alone.

Response times for letters aren’t much better. At last count, the response time for IRS correspondence was over 45 days, giving a whole new meaning to “snail mail.” Prior to the economic downturn, more staff were available to respond to taxpayer letters and forms.

Unlike most businesses who offer online chat or email options, the IRS doesn’t offer those services due to the sensitive nature of taxpayer information. Since email and chat portals aren’t as secure and due to the large flow of sensitive information, the IRS has not adopted these customer service technologies. Lack of funding has also delayed implementing any technological upgrades or phone system upgrades.

The Best Way To Get Through

Since the IRS doesn’t have email or chat customer service options, the best way to contact the IRS is by phone. IRS representatives can be reached via their Help Line at (800) 829-1040. This line is available from 7 a.m. to 7 p.m. Monday through Friday. If you’re calling late in the tax season or during the day, you could be in for a longer wait than if you called early in the tax season and/or earlier in the morning when call volume is lower.

What You Need to Know When Owing The IRS

If this is your first year with a tax balance, the thought of owing the IRS can be frightening. There’s no doubt you’ve heard everything from true stories to urban myths surrounding the power and the reach of the IRS. Very few entities such as the IRS have the ability to leverage assets and capital in order to recover a debt.

In most cases, however, you can prevent aggressive IRS collection tactics by understanding your role in clearing up a tax debt. By understanding these basics, you’ll be in a better position to formulate a plan for paying your tax debt.

Don’t Ignore IRS Notices

If you owe money for taxes, you’ll receive notices from the IRS via snail mail. Don’t ignore them or toss them in the recycling bin in hopes the IRS will forget. They won’t. Respond to each and every notice, and follow the instructions for payment.

If you can’t make the payment in full, call the IRS at number listed on the notice, and explain your situation. Despite nasty rumors to the contrary, the IRS is eager to work with taxpayers in resolving tax debt. The agent assigned to your case will explain your rights to you, and will make sure you understand them. Be sure to request a list of these rights in writing.

Understand Your Payment Options

If you can’t pay your tax debt in full, the IRS has several options available to you. Some of these options include:

While each of these options have their own qualification criteria, you’ll be able to avoid more aggressive IRS collection activity while paying off your tax debt.

Understand Due Process

Due process is a Constitutional right that guarantees everyone the right to go through an entire legal proceeding with no steps neglected or omitted. The same rule applies to IRS proceedings. If you’re not clear on the due process for your tax case, have the agent explain it to you or seek advice from a qualified tax pro.

Don’t Go It Alone

If the thought of dealing with the IRS leaves you cold, your best course of action is to enlist a qualified tax pro. Tax attorneys and Enrolled Agents have the ability to represent you in dealing with the IRS, and to negotiate with them on your behalf. They will explain your rights, review your case and help you determine which payment options you qualify for.

Your tax pro will also help you understand the complex jargon you might find in some IRS notices. A tax pro’s job is to understand and interpret tax law and tax codes so you won’t have to. That alone may well be worth the cost.

If you’re dealing with a tax balance for the first time, it’s easy to get unnerved at the prospect of dealing with the IRS. By understanding your rights, payment options and representation options, you’ll be able to tackle your tax debt with a solid understanding of the process. By enlisting a tax pro, you’ll have someone who can represent you and negotiate on your behalf.

We have qualified tax pros on staff who can help. Get started today by clicking the white “Start Chat” button at the top of the page, or give us a call. Don’t go it alone. We can help.

 

 

Inside Scoop: The CP2000 Notice

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It’s bad enough that a trip to the mailbox ends with a handful  of junk mail and bills. It’s even worse when there’s a letter from the IRS. After all, not much good can come from that, right?

In some cases, however, a letter from the IRS isn’t all that bad. Take the CP2000 letter for example; unlike an audit or collection notice, the CP2000 in most cases is informational in nature.

What’s In The CP2000

The IRS will issue the CP2000 when there is a discrepancy between information provided by you and the information provided by other sources, such as your employer. The most common triggers for a CP2000 notice are

  • Discrepancies in your social security number
  • Misspelled names
  • Discrepancies in dependent status
  • Missed tax credits

For example, if your social security number is different from what was stated on your employer’s W2, you’ll get a CP2000 notice.

When They’re Sent

If you filed your taxes electronically, chances are you’ll get your CP2000 notice within weeks. If you filed by snail mail, it could take several months for the IRS to process and verify all the information provided by you and other sources.

What To Do

Chances are, you won’t need to do anything on your part. If the IRS does require additional information, they’ll inform you of what they need in the body of the letter, along with an address or phone number for contacting them with any questions. In other instances, the letter is for informational purposes only.

Impact On Your Tax Liability

If the updated information includes another dependent or a missed tax credit for example, your tax liability could end up being lower than you originally thought. However, if you originally forgot to disclose additional income or if you took a deduction that ended up as disallowed by the IRS, your tax liability could be higher.

If that’s the case, you will be asked to sign and return a form acknowledging and agreeing with the new amount.

If you disagree with the IRS’s findings, you will have the opportunity to contact them via phone or mail, and to provide any supporting documentation.

As with any interaction with the IRS, the sooner you take care of it, the sooner you’ll be free of it. Don’t wait to respond if you disagree with the updated findings.

The CP2000 is just a “heads up” form the IRS, alerting you to any incorrect or missing information on your tax returns. Once you get the letter, follow all instructions, provide any needed information, and make copies of all information you send to the IRS, along with a copy of the letter. You’ll have it on hand should you ever need it in the future.