When you have serious tax issues, you need someone who knows tax law


How to Respond to an IRS Collection Notice

The IRS sends taxpayers many different types of collection notices. You should carefully read every notice to figure out how to respond and how long you have to pay your balance or contact the IRS.

Basic Collection Notices

If you’ve already been assessed taxes, you may receive a CP 501 or CP 503 notice. This is simply a bill informing that you have past due taxes.

Your total amount of back taxes, penalties, and interest will appear on the notice. This balance will increase every month as interest and penalties accumulate.

The notice won’t fully explain all the alternatives you have to paying in full. If you can’t pay the full bill, you should contact a tax attorney to discuss your collection alternatives.

Notice of Deficiency

A Notice of Deficiency is telling you that the IRS believes you owe taxes, but the taxes have not been formally assessed yet. If you disagree with the existence or amount of taxes, you still have a chance to argue your case.

You generally have 90 days to petition the Tax Court if you don’t agree with the tax assessment. If you agree, you can either pay the full amount or request a collection alternative. You may also receive a waiver form that the IRS asks you to sign if you agree with the assessment. If you aren’t sure what to do, don’t sign this until you talk to a tax attorney.

Notice of Intent to Levy

The Notice of Intent to Levy is the last notice the IRS must send you before your assets are seized. This notice can be sent before a wage garnishment, bank account levy, or another type of levy.

You have 30 days to request a Collection Due Process (CDP) hearing. You are generally much better off requesting the CDP hearing and proposing a collection alternative than allowing the levy to take place. You can also ask to stop the levy due to a financial hardship.

At the CDP hearing, you can request an installment agreement, Offer in Compromise, currently not collectible status, innocent spouse relief, or another collection alternative. The IRS will usually wait to process your request before seizing any of your assets.

Many IRS notices require a fast response. Contact a tax attorney immediately if you receive an IRS collection notice and want to protect your property from IRS seizure.

Get help with IRS collection notices by calling The Gartzman Law Firm at (770) 939-7710. We can listen to your concerns and help you find the best tax resolution strategy for your case.