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How to Deal with those Pesky IRS Notices and Settle Your IRS Tax Bill

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Receiving any sort of bill in the mail is stressful enough in and of itself; but seeing the Internal Revenue Service return address in the upper left hand corner of the envelope would send waves of terror through anyone’s body. As your adrenal glands begin working overtime, sending signals to your brain, you start to feel the blood rushing to your extremities, your hands get clammy, your heart races faster and faster, your mouth dries up, etc. It’s your body revving up the fight or flight response to an outside threat or potential attack. Although you may want to, and many of you probably have up until this point, the flight response (i.e. ignoring the issue) will NOT make it go away. Like an open wound left untreated, the longer you wait, the more it will continue to fester.

If you receive an IRS notice in the mail here are some tips you should follow:

If you get an IRS notice, here’s what to do :

  • Don’t ignore it. As I mentioned before, ignoring it will only make it worse! You can respond to most IRS notices quickly and easily. It is important that you reply right away
  • Focus on the issue. IRS issues usually deal with a specific issue about your tax return or tax account. Understanding the reason for your notice is important before you can comply
  • Follow Instructions. Read the notice carefully. It will tell you if you need to take any action to resolve the matter. You should follow the instructions.
  • Correction Notice. If it says that the IRS corrected your tax return, you should review the information provided and compare it to your tax return.
    • If you agree, you don’t need to reply unless a payment is due

     

    • If you don’t agree, it’s important that you respond to the IRS. Write a letter that explains why you don’t agree. Make sure to include the information and any documents you want the IRS to consider. Include the bottom tear-off portion of the notice with your letter. Mail your reply to the IRS at the address shown in the lower left part of the notice. Allow at least 30 days for a response from the IRS.
  • Premium Tax Credit. The IRS may send you a letter asking you to clarify or verify your premium tax credit information. The letter may ask for a copy of your Form 1095-A, Health Insurance Marketplace Statement. You should follow the instructions on the letter that you receive. This will help the IRS verify information and issue the appropriate refund.
  • No Need to Visit IRS. You can handle most notices without calling or visiting the IRS. If you do have questions, call the phone number in the upper right corner of the notice. You should have a copy of your tax return and the notice when you call.
  • Keep the Notice. Keep a copy of the notice you get from the IRS with your tax records.
  • Watch Out for Scams. Don’t fall victim for phone and phishing email scams that use the IRS as a lure. The IRS first contacts people about unpaid taxes by mail – not by phone. The IRS does not initiate contact with taxpayers by email, text or social media.
  • PAY YOUR TAX BILL. If you get a notice informing you that you are in debt from the IRS informing you that owe them money, you need to respond immediately. The longer you put it off, the more you will accumulate in interest and penalties. When it comes to paying your tax bill there are a number of viable options available.
    • Pay in full. If you have the available funds the easiest best way to get rid of the tax debt is to simply just pay it. It will save you a whole lot of time and unneeded stress in the long run and you will not accumulate any more in interest or penalties. If you would like to pay your tax bill there are a number of different ways to do so. You can visit www.irs.gov for instructions on how to do so.

For those who cannot pay their tax bill in full there are a number of different avenues for them to explore. These include:

  • Installment Agreement. An Installment Agreement is a tax payment plan wherein a negotiated monthly minimum payment amount is made and in exchange the IRS agrees not to pursue any new collection actions such as levies and wage garnishments. While on the installment agreement your unpaid tax balance will continue accumulating interest and penalties and any tax refunds will continue to be garnished and be appropriated toward your tax debt. If you do find yourself on an installment agreement you need to be sure to never miss a payment because in the event that you do the agreement will be nullified and you will be placed back in collections.
  • Offer In Compromise. An Offer In Compromise or OIC is another viable option for settling a tax debt for those who qualify. Essentially, an OIC is a way to settle your tax debt with the IRS for less than what you owe. The amount offered is based on a number of factors and requires a great deal of work but OICs are an area we, at Ayar Law Group, are very adept at and something we do on a daily basis. We have a very high success rate and quite often are successful with clients where other attorneys have failed. If you think you may be eligible for this type of settlement call us today and we would be more than happy to go over your case with you to determine whether or not you qualify.
  • Currently Non-Collectible Status. For Taxpayers with financial hardship rendering them incapable of making minimum tax payments while also trying to meet their basic living expenses, they may qualify for Currently Non-Collectible Status. If you qualify for CNC status the IRS would remove your account from collections, and place it in Status 53. This would stop all interest and penalties from accruing and any levies, liens and garnishments from being issued.

 

Receiving an IRS notice can be extremely stressful but it doesn’t have to be. Let us help you alleviate some of that stress and deal with the IRS so you won’t have to. We are experienced professionals who deal only in tax controversy which has allowed us to hone our craft and we have successfully resolved nearly every type of tax issue imaginable. If you receive an IRS notice you do not understand give us a call to set up a free consultation and one of our experienced tax attorneys will guide you on the best course of action for dealing with your notice.

 

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.