Category: IRS Notices

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IRS Notices Tax Levy

What is the IRS Notice CP 523?

irs form 656 for offer in compromise
Photo from IRS website

This letter is sent to you by the IRS if you default on your IRS payment plan. An explanation is given about the payment plan and if there is no action taken within 30 days, this agreement may be terminated. A tax lien may be levied against your assets after about 90 days if there is still no action taken.

For U.S. residents, notices are sent via certified mail. Those who are staying abroad are contacted through registered mail.

When is the IRS Notice CP 523 usually received?

Should your check payment bounce or other monthly payment arrangements go awry, the payment plan is considered defaulted by the IRS. Other cases may be that insufficient financial information was submitted or incorrectly inputted. Obtaining a new balance or failing to file a tax return also puts you in default. Any failure to pay will be taken as a default.

What are the steps to take when you receive the IRS Notice CP 523?

Make a payment before the termination date or payment deadline indicated in the notice. That might put you back on the installment plan. Call the IRS to confirm the payment made.

Contact the IRS immediately if there are errors in the payment agreement or the amount due is incorrect.

When your new balance accrues, that will probably lead to a payment plan default. Coordinate with the IRS or a tax professional to restructure a new monthly payment plan. The form 433-F, a financial statement, may require submission.

Request for a Collections Appeals Program (CAP) if you are unable to resolve this issue with the IRS. You must apply for this within 30 days from the date of termination.

What are the timelines that occur upon receipt of IRS Notice CP 523?

If there’s no payment made when notice was received, the payment plan may be terminated after 30 days based on the printed date on the notice. You have 45 days to appeal the defaulted agreement. Wait for the agreement to terminate, then you have 76 days to appeal the notice of intent to terminate the installment agreement.

If there is no action within 90 days, the failure-to-pay penalty rate increases, and a tax lien may be filed. Assets may be seized. Don’t wait for this to happen by contacting a tax professional to help you sort out this matter.

Again, please don’t hesitate to get information and guidance from professionals who are very well-versed with these types of cases. The Installment Agreement may be reinstated if several factors come into play. This may mean submitting more financial information so your capacity to pay can be without question. Don’t let it lag too far or you might have a more difficult time getting your monthly installments in order.

There may be some additional fees and other documents that need to be filled out and promptly given to the IRS. Avoid getting tangled up in having a tax lien levied against you. This is because you risk losing your assets that might be used to settle your outstanding tax debt liabilities.

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IRS Notices

IRS CP90 Notice

Being the most powerful collection agency in the world, the IRS can forcibly take funds or property from a taxpayer. As a warning, the Form CP 90, or considered as Final Notice of Intent to Levy and Your Right to a Hearing, will be sent to you.
Please do not ignore this.

This formal notice of the Form CP 90 gives the IRS the right to seize assets due to non-payment of tax debts. Any income, retirement benefits, property, bank accounts, plus other assets may be seized if there is no response within 30 days.

This notice is sent out through the certified mail. The recipient must sign this letter right at the door or at the post office. This shows that the IRS has done everything to reach out to the taxpayer. Don’t avoid picking up the mail from the post office. This notice from the IRS follows a particular protocol properly informing the taxpayer about an impending action.

I don’t agree with the Form CP 90, what should I do?

You have the right to appeal should you disagree with the information on the Form CP 90. Complete Form 12153 to begin the process which is a Request for a Collection Due Process Hearing. Please mail once completed to the address indicated on the Form CP 90.
Your submitted appeal moves from the collection department to the appeals department of the IRS. Most probably, an officer will be assigned to your case. This makes it easier than talking to a different person each time regarding your particular situation.
There may be a three to six-month extension for payment as your appeal is being processed. But interest will accrue during those months that the appeal is on-going.

If someone is helping you with your taxes, will that make a difference?

Your accountant can submit Form 2848 or Power of Attorney and Declaration of Representation. The IRS is given permission by this form to coordinate with your tax professional. Collection activity gets diverted to this person so you will be free from any calls or other letters.

If you ignore the Form CP 90 Notice, what will happen?

After thirty days have passed and no action has been taken, this gives the IRS the right to levy your assets. Wage or income, vehicles, property, bank funds, and other assets can be seized. Essential clothing and moderately priced transportation, or income to provide court-ordered child support may be exempted.
Your Social Security payments may even be levied at 15%. If the IRS plans to do this, a CP 91 may be sent instead.

Where can you find assistance with your Form CP 90?

It can be quite daunting to receive a Form CP 90. If the previous notifications didn’t faze you, this one should give you the heebie-jeebies. Consulting with a tax professional will quell your fears somewhat.
Getting help for your tax debt is doable with the proper assistance. Contact a tax professional as soon as you can.