You got an IRS letter. Your heart starts pounding in your chest. Your mouth gets dry, and you lose your ability to swallow.
Clients that come into my practice in Lufkin, Texas feel exactly the same way when those letters arrive in their mailbox. So when they get to my office we're able to alleviate a lot of their fears by explaining what those letters mean and how we can help them stop the IRS notices and threats of levies.
When your tax return is filed the IRS and there is a balance due the IRS will process your return and send you a billing notice letting you know that there is still a balance due. If the balance isn't paid 30 days after the billing notice is mailed out, the IRS will send three more notices and a letter:
CP501 - This four page notice is a friendly reminder from the IRS that you still have an unpaid tax bill. The CP501 includes a recap of the amount you owe plus any penalties and interest that have accrued. The IRS outlines a variety of ways you can pay your balance and explains what will happen if you don't. There is even a convenient voucher you can cut off and send along with any payment should you choose to mail one in. And if you'd like to contact the IRS to address the balance due there is contact information as well. If the IRS does not have record of receiving a payment in full on the account within 30 days from the notice date a CP503 will be mailed.
CP503 - This is the second reminder that you have an unpaid tax debt. The formatting and text of the CP503 is almost identical to the CP501, but the balance will be greater because the IRS has assessed additional penalties and interest on the original balance due. The taxpayer again has 30 days to pay the balance due in full before the CP504 is mailed out.
CP504 - This notice again looks very similar to the CP501 and the CP503 with one important distinction. It contains this text "Notice of Intent to Levy" above the balance due. The IRS is informing the taxpayer that if the balance continues to go unpaid they will levy state tax refunds and/or other property.
LT11 - Letter 11 is another "Notice of Intent to Levy", but there is a critical difference between it and the CP504. While the IRS reminds the taxpayer that they intend to levy his/her assets, the taxpayer is notified of their right to request a Collection Due Process Hearing (CDP). A copy of Form 12153 is included along with Letter 11, and this form must be filed within 30 days from the date of LT11 in order for the taxpayer to secure a CDP hearing. The filing Form 12153 will halt IRS collection activity, forward their case to IRS appeals, and buy the taxpayer additional time to file past due tax returns.
If you have received any of the above notices and live in Lufkin, TX, Angelina County or anywhere else in East Texas please don't delay in contacting me at 903-631-0317 or by email firstname.lastname@example.org