The Tax Notification and Payment Request letter sounds serious, and it actually is. This is the latest in a series of soft-spoken letters the IRS sends to collect a tax debt. The wording of the Notice is often more aggressive, explaining actions the IRS can and will take if the tax debt is not paid or the taxpayer does not respond. This correspondence usually arrives as certified mail, which must be signed for in order to receive it. Many believe that if they do not sign the letter, it is as if they never received it. This is not true, because the IRS only needs to send the Notice, not make sure the taxpayer receives it.
By the time the taxpayer receives the Notice, they should be aware of their tax debt. If there is a discrepancy, or if the taxpayer believes the debt is incorrect, a Notice of Hearing is sent along with the Demand for Payment. The taxpayer’s hearing request must be a legitimate claim. All requests made for the reason that the taxpayer cannot pay the assessed debt will be denied. The IRS has other alternatives to accommodate those situations.
Once the Notice is received, and there are no grounds for an appeal, the IRS urges taxpayers to comply with the Notice and remit the tax liability in full. If the taxpayer is unable to pay the amount in full, the IRS advises the taxpayer to call an IRS representative and begin arranging an installment plan. If the taxpayer takes no action, the Notice clearly states the IRS’s intent to pursue the debt 30 days after the Notice is issued in several ways:
- bank lien
- wage lien
- property link
- Forfeiture of Assets
Many people try to run the IRS on their own and are often confused by the process. Some may make agreements that they cannot keep. If a taxpayer chooses to conduct business with the IRS personally, the IRS assumes that he or she knows the tax law accurately and can effectively act as their own tax attorney. It is strongly suggested that upon receipt of the Notice, the taxpayer finds professional representation to communicate with the IRS on their behalf.
Receiving a Tax Notice and Payment Demand is a strict announcement affirming the assessed tax liability, requiring the taxpayer to become proactive in handling the matter. It is also sent to indicate the specific actions the IRS could and would take to collect the tax debt. The Notice informs the taxpayer of their right to an appeal and provides contact numbers to advance the collection process. If this letter is ignored, the letter that follows 30 days later is a Notice of Intent to Take Action Against the Taxpayer. In the end, it is better to contact the IRS or a professional who can help you with the matter because after this letter, the penalties are more severe, it becomes more difficult to negotiate with the IRS and the debt continues to increase in interest and fees.