During the worst of the COVID-19 pandemic, the IRS stopped sending out many collection notices. As of 2023, the agency plans to start sending out notices again. If you have been behind on your tax bill for a few years, you may have thought the IRS just forgot, but that’s not the case — the agency always follows up on tax debts, and if you don’t pay, the IRS can enforce collection actions against you.
Have you received an IRS notice? Wondering what it means? Trying to figure out what to do? Contact us at (404) 233-9800 to take the first step toward a resolution. At Wiggam Law, we can communicate with the IRS on your behalf and help you put your tax debt behind you.
Otherwise, keep reading for an overview of the most common IRS Notices. Keep in mind that this is not an exhaustive list and that the IRS changes its notices on a regular basis. Have questions? Please don’t hesitate to reach out via our online consultation form below.
The Collection Notice Cycle
If you don’t pay your tax bill, the IRS will send you several different collection notices. This can happen in the following situations:
- If you file and don’t pay the total tax liability
- If the IRS makes changes to your tax return and you don’t pay
- If the IRS adjusts your tax return during an audit and you don’t pay
Usually, the agency sends you a notice of delinquency followed by a few reminders. If you don’t pay, the IRS will send you a notice of intent to levy — do not ignore this notice, or the agency will start seizing your assets.
Although the timing can vary, collection notices typically come on a six to eight-week cycle. If you haven’t heard from the IRS in years and you receive a notice, don’t assume it will take years to receive the next notice. Generally, once you get one notice, the game is on, and you will see more soon.
Most Common IRS Collection Notices
The CP14 is one of the first notices the IRS sends if you are behind on your tax bill. You don’t need to panic if you receive this notice. Generally, the IRS sends other notices before enforcing severe collection actions.
However, if you receive this notice and owe over $10,000, the agency is highly likely to issue a tax lien on your assets, and once you receive this notice, the IRS will start to send increasingly serious notices. To be on the safe side, you should make payment arrangements as soon as you receive this notice.
Nearly everyone who owes a balance will also receive CP71. This is your annual reminder of the balance due. In most cases, you will even receive this letter if you have an existing payment plan or if you’ve applied for a relief program like an offer in compromise or innocent spouse relief.
Additionally, you may also receive some of these general letters if you have unpaid taxes:
- LT16: Call the IRS about your tax debt
- LT17: Make payment arrangements, apply for hardship, or appeal the tax
- LT19: Pay in full or set up online payments
Intent to Levy Notices
Arguably, the most serious IRS notices are the Intent to Levy notices. If you receive a final notice of intent to levy, the IRS will start levying your wages, bank accounts, or other assets.
Generally, you have 30 days to respond to an intent to levy notice but check the date on the letter to be sure. If you don’t respond by the deadline, the IRS will move forward with the levy. Once a wage garnishment or an asset seizure is in place, it can be tough to remove.
The IRS sends several different levy notices, including the following:
- CP90: Intent to levy assets and notice of your right to a hearing
- CP297: Intent to levy certain assets and your right to a hearing
- LT11: Intent to levy property or your rights to property
- LT1058: Intent to seize property
Refund Offset Notices
A refund offset is a type of levy in that the IRS levies (seizes) your tax refund. Before taking your tax refund, the agency doesn’t have to send you an advance warning as it does with other types of levy notices, but it may still send one of the following notices:
- CP16 — The IRS is keeping your tax refund to cover a tax liability created by an error on your tax return
- CP49 — The IRS is keeping your tax refund to cover your unpaid tax, and it will send you the difference if there’s any money left
- CP88 — The agency is keeping your tax refund because you have unfiled returns, and you may owe a tax bill
Automated Collection Notices
Most IRS notices aren’t typed by hand and put in an envelope by a human. Instead, they are generated by the IRS’s Automated Collection System (ACS). The IRS stopped sending ACS letters for a few years, but as of early 2023, the agency has resumed sending out these letters.
Here are some notices you can expect to receive if your account is in the automated system.
CP501
Typically, the CP501 notice comes from the IRS’s Automated Collection System (ACS). It’s the first reminder of your bill due. Generally, you will receive two additional “warning” notices (CP502 and CP503), and then the IRS will move on to an intent to levy (CP504).
CP503
This is your second or third notice of balance due. It usually comes about six weeks after the CP501 (or six weeks after the CP502 if applicable). This notice outlines your payment options, and if you ignore the notice, the IRS will send you a notice of intent to levy.
CP504
CP504 is a final notice of intent to levy. While you may have been able to ignore previous notices, you cannot ignore this notice. If you fail to take action in 30 days, the IRS can seize your wages, other income, bank accounts, or assets.
These are just a few of the ACS notices. The agency sends many notices through this system. If you receive an ACS letter and you call in, your call will be answered by someone in a big call center. In contrast, if a revenue agent sends your letter, the notice will have a phone number so you can reach them directly.
Assignment to a Collection Agency
As of 2015, the IRS has started outsourcing some accounts to private collection agencies. The IRS will send you this letter if it has placed your account with a private agency, and the agency should also send you a placement letter.
The IRS CP40 will have a code on the letter that you can use to verify the collection agency. Do not talk to anyone at a collection agency unless they know the code on your notice.
Notices About Loss of Passport
If you have what the IRS calls “seriously delinquent” tax debt, the agency can certify your debt to the State Department. Then, the department can revoke your passport and/or refuse to issue you a new one.
As of 2023, seriously delinquent debt is anything over $59,000. This number increases annually with inflation. You may receive notice CP504B or CP508C if the agency is going to take your passport.
Installment Agreement Notices
The IRS will send you a letter if it accepts or rejects your installment agreement. While you have an active agreement, you may also get CP14A. This is the same as the usual CP14, but in addition to alerting you about your tax due, it also acknowledges that you have requested a payment plan.
If you default on your installment agreement, the IRS may send you CP523 (Intent to Terminate Installment Agreement and Seize Your Assets). Make sure you contact the agency immediately if this happens.
Notices About Changes to Your Tax Account
If the IRS receives information that contradicts the details on your tax return, it will update your return and send you a letter. The notice will update the reason for the change and the amount that you owe due to the change.
- CP11: Change due to math error or miscalculation
- CP22A: Changes initiated by the taxpayer — if you didn’t make changes, contact the IRS immediately
- CP3219A: Changes due to information from a third party
- CP2000: Changes related to unreported income (based on income documents received from a third party)
In most cases, you will get a limited amount of time to respond if you disagree with the changes.
Fake IRS Notices
Some letters that look like official IRS notices may be fake. Unfortunately, scam artists know that many people are afraid of the IRS, and they leverage this fear to steal money or information from people.
Be very cautious about this risk — if you receive an IRS letter that appears fake, contact a tax professional or call the IRS directly. Remember that if you think the letter may be fake, you shouldn’t use the phone number on the letter. Instead, use the agency’s main phone number at (800) 829-1040.
Audit Notices
An audit notice isn’t a collection notice, but it is very serious, and you must respond as directed. The notice may ask you to verify a few of the details on your tax return, or it may ask you to schedule an in-person meeting with an IRS auditor to go over every detail on your return.
For example, CP75 is a type of audit notice. The IRS sends this letter when it wants more information about a tax credit you claimed on your return. Other audit notices are much more extensive and ask for a lot more information.
Review the notice carefully to ensure it’s legitimate. Then, contact the IRS to learn more about the scope of the audit. To help the process move smoothly, you may want to hire audit representation.
What to Do if You Receive a Letter From the IRS
First of all, take a deep breath. Even with the worst IRS notices, you have time to respond. Then, look for the deadline in the letter. Ensure you know when you need to respond or risk incurring more penalties and facing collection actions.
You are not alone if you can’t deal with opening your IRS notices. Tax debt is very stressful, and sometimes, it’s easier just to ignore the situation. Unfortunately, this strategy won’t hold up for long. Eventually, the agency will start to garnish your wages, seize the funds in your bank account, or take other actions.
Instead of ignoring the situation, reach out to a tax professional. They can answer your questions, help you figure out the best steps forward, and negotiate with the IRS on your behalf.
Contact the experienced tax attorneys at Wiggam Law today to take the first step toward resolving your tax issue. Call us at (404) 233-9800 or complete our online consultation form to connect with our team.