I’ve always loved receiving mail. Why you ask? The possibilities of what could be found in the box: a card from a distant relative, a surprise check for an overpayment made at the doctor’s office, a catalog from my favorite store offering the perfect jacket for the season, a bill that ends up being less than I had thought, or the latest version of my favorite magazine. But what if you are a taxpayer with a balance owed to the IRS… seeing the postal delivery truck coming up your street could make you break out into a cold sweat.

From speaking with my clients over the years, I have been given a peek into the thoughts that plague them before seeking help with addressing their tax debts:

• “Will there be anything with the dreaded IRS return address?”
• “How much will the next bill show I owe with penalties and interest?”
• “Is the next notice going to say they are taking action against me?”

As you can imagine, the fear escalates quickly. And the IRS doesn’t help dissuade the fears that build because their computer system is programmed to issue a series of notices each time a taxpayer accrues a tax debt. These notices escalate over time: they start with a polite request to address the balance owed and end with aggressive collection threats, continually pelting the taxpayer until the tax debt is handled. And because the notice series triggers with each debt recorded and considers the account in a cumulative way, the taxpayer often receives a stack of notices at one time… most saying the same thing but each focusing on a separate tax period’s debt.

I want to share with you the key notices you should watch for, either as a taxpayer or as a bookkeeper, accountant, CPA, or attorney handling your client’s affairs:

Where it all begins: IRS Notice CP14, or “Notice of Tax Due and Demand for Payment.” This notice is the first in the series of attempts the IRS makes to inspire a taxpayer to be proactive with a balance owed, and it asks for full payment within 21 days. While it may seem silly to receive a notice like this for a $5.00 tax discrepancy, the minimum threshold set for the IRS computer system to issue this notice, it is effective as the first line of offense for the IRS’ Collection Department.

IRS Notice 3172, “Notice of Lien Filed and Right to Collection Due Process Hearing Request Under IRC 6320”, is another standard IRS notice that taxpayers should slow down and pay attention to. This letter is an official notification that the IRS is filing a formal tax lien because the balance remains unaddressed. The lien is recorded with the County Clerk’s office associated with the address on the taxpayer’s last tax return filed. Although tax liens for individuals are no longer reported on standard credit reports, they are still reported on business credit reports. Underwriters will find the tax liens recorded when considering a loan for large purchases for both individual and business taxpayers.

The IRS’ CP504 notice is a final warning shot across the bough of a taxpayer, “Notice of Intent to Levy.” This means the IRS’ patience is wearing thin, and if the taxpayer does not attempt to address the balance owed within the 30 days given in the notice, the IRS will take aggressive collection action. These actions typically begin with bank account levies but can escalate to wage garnishments, accounts receivable levies, or the seizure of state tax refunds that may be due to the taxpayer.

IRS CP508C is the formal notification to individual taxpayers that the IRS has notified the U.S. Department of State of the balance as it is now considered “seriously delinquent.” This notification occurs when an individual taxpayer’s unaddressed tax debt totals an amount over a designated threshold, which as of 2023, is $55,000. As such, the U.S. Department of State will not approve a passport application or renewal application until official notification is issued by the IRS advising that the tax debt is being addressed in one manner or another.

If you or your client receive these types of notices from the IRS or something similar from the State, Golden Lion Tax Solutions is here to help. In many cases, we can take action before the situation escalates and prevent the aggressive collection action levels from coming about. If the problem has already escalated and collection tactics have commenced, we are experts at diffusing the aggression levels and getting in control of what can feel like a runaway train.

Our team of licensed professionals has a trusted and proven process to find the best solutions to resolve any IRS or State tax debt. We have over 23 years of industry experience and know how to navigate through the tax authority’s aggression to bring a final solution to the problem. Call us to see if we will be a good fit for you or your client’s tax debt situation.

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Trust. Protection. Wisdom.

Your future and your family deserve the right protection. Golden Lion Tax Solutions will be your advisor and confidant throughout the entire journey. We guarantee to offer you or your business best-case solutions for your tax debt. We are by your side every step of the way. Start now and get your life back.

For help with your tax debts, email contactus@goldenliontaxsolutions.com or call 833-LION-TAX (833-546-6829)

Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate solution to fit your situation.