When the IRS sends you a notice stating that you owe money, it needs to be taken seriously. The IRS may send one or two notices stating their intention to levy your property, accounts or wages, if you don’t pay your tax debt. They may identify your assets that they plan to seize, such as your house, land, Social Security benefits or bank accounts. They may put a lien against your house. Unless you are able to pay off the debt in full, you need to call us immediately for help. The sooner you come to us for help, the more options may be available to you.

When you receive a 30 or 10 day request to respond, your time is up. It is very important to respond to these as you receive them because the IRS may already be getting ready to levy your property, accounts or wages. With your notice you will receive information about the IRS collection process and about the accruing penalties, interest and fees. They expect you to understand these. They are ready to start taking your property and they are ready to hand over your account to a collection agency.

The last notice you will receive before the IRS starts seizing your assets is the Final Notice of Intent to Levy Property and Notice of Right to a Hearing. You have a serious problem. Call us to see how we can help you, before your assets disappear.

CP 101 – The IRS has made changes to your federal unemployment tax return. They say you owe additional money, as well as penalties and interest.

CP 102 – The IRS has made changes to your tax return. They say you owe additional money, as well as penalties and interest.

CP 160 – The IRS says that you owe money and that the penalties and interest will continue to accrue until the amount is paid in full.

CP 161 – The IRS says that you owe money and that the penalties and interest will continue to accrue until the amount is paid in full.

CP 167 – The IRS has found a discrepancy between the information on record with your state unemployment agency and the information that you reported to the IRS. The IRS proposes an increase in your federal unemployment tax. If you disagree with the changes, call us.

CP 174 – The IRS says that your explanation for exempt payments listed on your unemployment tax return is not acceptable or is missing. They say that you must send an explanation for your exempt payments.

CP 207 – The IRS says that your record of federal tax liability (ROFTL) was incomplete, missing, or showed a tax liability that didn’t match the taxes on your return. They say you need to submit another ROFTL and that they have added a penalty for the mismatch.

CP 253 – The IRS has found a discrepancy with your reported amounts on form W-3 to the Social Security Administration with your reported amounts on forms 941, 943, 945 or Schedule H. They say you must refile the forms to explain the discrepancy or show that the IRS or Social Security Administration is incorrect.

CP 260 – The IRS made a mistake by crediting your account. They have reversed their error. They say you owe additional money, as well as penalties and interest.

CP 297 – The IRS intends to levy your property unless the amount you owe is paid in full. Call us immediately.

CP 298 – The IRS intends to levy your Social Security benefits to repay your tax debt. You must respond within 30 days of the date on the notice. Do not wait 30 days. Call us immediately.

If the IRS finds a problem with your tax return, you will receive a letter. When the IRS proposes a change to your tax return, you do not need to accept the change. Sometimes the IRS does make mistakes, one reason being many changes are computer generated. If you have questions about your IRS letter or feel that it might be wrong, give us a call. We can help. We deal with these every day and will know how to help you.

Below are some letters that you might receive from the IRS if they propose that you owe additional money:

Individual Filers –

CP 11 – The IRS has made changes to your tax return because of a miscalculation. They say you owe additional money, as well as penalties and interest.

CP 11A – The IRS has made changes related to the Earned Income Credit on your tax return because of a miscalculation. They say you owe additional money, as well as penalties and interest.

CP 11M – The IRS has made changes related to the Making Work Pay and Government Retiree Credit. They say you owe additional money, as well as penalties and interest.

CP 14 – The IRS says you owe money on unpaid taxes, as well as penalties and interest.

CP 21A/CP 22A – The IRS made changes that you requested for your tax return and you owe money, as well as penalties and interest, because of the changes.

CP 21E/CP 22E – The IRS made changes to your tax return because of your audit. They say you owe additional money, as well as penalties and interest.

CP 21I/CP 22I – The IRS made changes related to your IRA taxes on your tax return. They say you owe additional money, as well as penalties and interest.

CP 23 –The IRS found a discrepancy with the estimated tax payments that you have paid during the year with the estimated tax payments that you reported on your tax return. You may owe additional money, as well as penalties and interest.

CP 88 – The IRS says that you did not file a tax return from a previous year and must do so in order to collect a tax return refund from the current year.

CP 90 – The IRS says that they intend to levy your assets because of your tax debt, if you don’t respond within 30 days from the date of the notice. You can request a Collection Due Process Hearing within these 30 days. Call us immediately. Do not wait 30 days. If you wait, the IRS will take your money, your problem will grow larger and it will be more costly to fix.

CP 91 – The IRS says they intend to levy your Social Security benefits because of your tax debt, if you don’t respond within 30 days from the date of the notice. Call us immediately. Do not wait 30 days. If you wait, the IRS will take a portion of your benefits, your problem will grow larger and be more costly to fix.

CP 501 – The IRS says that you owe money on your taxes from a previous year. They may list their intended actions if you don’t respond within 10 days from the date of the notice.

CP 503 – This is a second notice that the IRS sends to reiterate CP 501.

CP 504 – This is the final notice that the IRS sends to remind you to pay your unpaid taxes. They will place levies on your property, which may include seizing your state income tax refund.

CP 521 – The IRS says that your installment agreement payment is due and that penalties, interest and fees will continue to accumulate until the debt is paid in full.

CP 523 – You have defaulted on your installment agreement that you set up with the IRS. They are terminating your installment agreement and seizing your property.

CP 2000 – The IRS says that the information provided to them by your employer, bank or other related payer, does not match the information that you provided to them on your tax return. After an audit, they are proposing changes that they intend to make on your return. You may owe additional money, as well as penalties and interest. If you disagree with the changes, call us. We can help.

In each attempt to settle unsecured debts (typically credit cards) remember that the credit card companies want to first hold you to the terms of the agreement, but as time goes on they become more and more willing to settle. I have found that settling has to be first preceded by missing payments and typically the best time to try to settle is after the account is 90 days late and less than 180 days late.  The settlement will normally require a lump sum payment and not simply renegotiating the payment arrangements so you really need to have available funds to attempt a settlement. If you don’t have funds to do a lump sum settlement then another option is the use of the bankruptcy court to discharge the debt.

I have worked with many clients who choose to avoid bankruptcy by attempting to settle with each of their creditors. When this road is attempted for unsecured debts it is best to have a plan of which creditors will be approached first and what is the total amount of available capital that can be used to settle with the creditors. I suggest dealing with them in stages depending on the size and importance of each creditor. I have been able to settle debts for clients from just a few thousand dollars all the way up to clients who have had 500k in unsecured debts. Typically we have used this to avoid bankruptcy and many times it works very well if the client has assets that they do not want to expose to a bankruptcy filing. In many cases I have settled unsecured or credit card debt for between 20-40 cents on the dollar owed. So do a good assessment of what is your situation and then consider if you have resources to attempt to do settlements and if so either attempt to contact the creditors yourself or hire an attorney to do the negotiating for you. If you use a attorney its best to get a referral and to find out the cost of such service up front if possible.

The IRS contacts you when they feel you owe them money. This may be a debt that you know you owe or it may be a debt that came about because the IRS made a change on your return. They make changes for various reasons, one of which is an audit of your tax return. The important point to know is that as a result the debt will continue to accrue penalties, interest and fees until it is paid in full. So it is imperative that the IRS is contacted immediately.

You may be tempted to contact the IRS directly or maybe an IRS agent has tried to contact you. In either case, be careful. They can use anything you say against you. If you give them too many details, the agent may find an alternate route to collect extra money from you. If you don’t give them enough details, you can be accused of tax evasion or tax fraud. If you are speaking with the IRS, they will assume that you know tax law. If you don’t, call us. We have tax attorneys. Let us deal with the IRS on your behalf. We deal with them every day. We can solve your problems.

Dealing with taxes within the Bankruptcy Courts is a problem that causes a lot of confusion for clients. It can also sometimes be difficult for the tax or bankruptcy attorney to sort out the many details and timelines. In my practice, I routinely advise clients in both areas. Most of the time, we are able to discharge IRS debts or create payment plans through the Bankruptcy Courts that the IRS would never even consider. It is best to work with an attorney who is well-versed in both areas of the law, has a deep understanding of the process in which back taxes are dealt with under the Bankruptcy Code and how these issues should be handled within the practice. Each client situation is different and the idea of crafting a plan can be painstaking but if the client is willing and the attorney is knowledgeable, then many times taxes can be dealt with and sometimes even eliminated through the use of the Bankruptcy Code. I have seen attorneys who do not understand the basics of bankruptcy timelines miss the opportunity to discharge tax debts due to a lack of professional follow through. So it is most advisable for a client to do a thorough investigation into the attorney they are using for either tax problems and or bankruptcy before committing to any plan.

Please call my office for an initial consultation either by phone or in person, if your issues need further clarification or if you need my assistance, please call 810-245-0813 or email me at lawoffice@toddcourser.com.