When a taxpayer receives a collection notice from the IRS, they often panic and don't
know where to turn for a solution. Some taxpayers choose to bury their heads in the sand
and hope that the problem will magically disappear. Others assume that they are going to
jail, and are scared to respond. In most circumstances, neither does it go away nor does the
taxpayer go to jail.
It is important for the Taxpayer to meet the situation head on by taking the following steps:
1) File a Tax return for the year(s) in question . The returns will either be filed by the
Taxpayer or by the IRS themselves. When filed by the IRS, any deductions that the
taxpayer may be entitled to are not taken into consideration resulting in the highest tax
amount possibly being due.
2) Once returns have been filed, the tax amounts due are assessed with penalties and
interest. There can be more than one kind of penalty assessed, and interest will continue to
accrue until the debt is paid.
3) A series of Tax notices requesting payment in full will be mailed to the Taxpayer. It may
be advisable for the taxpayer to make payment in full if funds are available. If this is not
possible, a monthly payment plan may be arranged or another collection alternative may
be recommended. Collection alternatives include but are not limited to Offer in
Compromise (negotiating lower amount due), Innocent Spouse relief (Spouse not being
liable for a jointly filed return), Debt currently not collectible (collection actions stop and
account is put in temporary suspense status), Tax Levy (IRS attaching your Real Estate or
Financial accounts in an effort to collect the debt).
4) Enforced IRS collection will begin and will increase in severity if notices are ignored and
no action is taken by or on behalf of the taxpayer. It is important to take action early on, or
the amount due may increase drastically due to penalties and interest.
Often, taxpayers are of the false belief that if they do nothing and don't file returns, that the
IRS will simply forget about them. Do not make this mistake! The IRS has become more
automated, and they will enforce amounts due to them, often aggressively levying bank
and retirement accounts.
If you or someone you know in the Oceanside, California area has received an IRS
collection notice, feel free to contact me directly at 760-757-1878 or by email at:
firstname.lastname@example.org for a consultation. Our mission is to get you back into IRS Compliance,
while reducing your tax liability and burden. Sutter Tax Website