Tax Returns and Claims for Payments sound serious, and they are. This is the latest in a series of light letters sent by the IRS to collect tax debts. The wording of the Notice is usually more aggressive and describes the actions the IRS can and will take if the tax debt is not paid, or if the taxpayer does not respond. This correspondence usually comes as a certified letter, which needs to be signed in order to receive it. Many believe that if they don’t sign the letter, it’s as if they never received it. This is not true, because the IRS only needs to send the Notice, not ensure the taxpayer receives it.
When taxpayers receive a tax return, they must know their tax debt. If there is a discrepancy, or if the Taxpayer is of the opinion that the debt is not correct, then the Notice of Hearing is sent together with the Claim for Payment. A taxpayer’s request for an audit must be a valid claim. All requests made on the grounds that the taxpayer is unable to pay the assessed debt will be rejected. The IRS has other alternatives to accommodate the situation.
Once the Notice is received, and there is no reason to appeal, the IRS urges taxpayers to comply with the Notice and submit payment for the tax payable in full. If the taxpayer is unable to pay the full amount, the IRS advises the taxpayer to call an IRS representative and begin making arrangements for an installment plan. If no action is taken by the taxpayer, the Notice clearly states the IRS’ intention to pursue the debt 30 days after the Notice is issued in several ways:
- Bank Retribution
- Wage Retribution
- Right of ownership
- Asset Confiscation
Many people try and handle the IRS themselves and are often confused by the process. Some may enter into arrangements that they cannot fulfill. If a taxpayer decides to do business with the IRS personally, the IRS assumes they are accurately aware of the tax laws, and can effectively act as their own tax attorney. It is strongly recommended that upon receipt of the Notice, taxpayers seek a professional representative to correspond with the IRS on their behalf.
Receipt of Tax Return and Claim for Deposit is a firm announcement that confirms the assessed tax debt, which requires the Taxpayer to be proactive in dealing with this matter. It is also sent to indicate the specific actions the IRS can and will take to collect tax debts. The notice informs taxpayers of their right to appeal, and provides a contact number to continue the billing process. If this letter is ignored, the next letter 30 days later is a Notice of Intention to take action against the taxpayer. In the end, it’s better to contact the IRS or a professional who can help with the matter because after this letter, the penalties are tougher, the IRS becomes more difficult to negotiate with, and debt continues to accrue in interest and fees.