The COVID-19 pandemic has shuttered thousands of businesses covered by disaster declarations over the past few years, and that includes many IRS offices nationwide. As IRS locations begin to reopen, they’ve started to send out balance due notices to people who owe them money.
If you’re one of the taxpayers receiving these letters, you might be confused about what exactly the notice means for you. Here is what you need to know about IRS balance due notices.
As the name suggests, the IRS will send you a balance due notice if you owe a balance to them. Due to the time it takes to generate updated IRS balance due notices, the IRS might send you a notice with a date that’s past due. However, you should find a memo about extended due dates enclosed with your letter.
The IRS began sending out these notices in May 2023. Inside, you should find the balance due date, which will depend on your original due date and your tax return type.
The balance due notice isn’t the only IRS statement that you might find in the mail. The IRS might also send you a notice when:
If the IRS sends you a balance due notice, read it carefully to make sure you understand what it’s asking of you. Even if you can’t afford the full amount, it’s wise to pay the IRS as much as you can.
The fastest way to pay your balance is to do so online. The IRS also accepts wire transfers, money orders, checks, and cash through approved retail partners.
The IRS may be willing to set up a payment plan for you, too, so you can pay what you owe a little at a time. It’s better to pay at least something rather than nothing. Ignoring your balance will lead to hefty interest and penalties that could add thousands to your tax burden.
Short-term payment plans (less than 180 days) don’t incur any fees. If you need longer, you’ll have to pay a setup fee, which varies depending on how you apply for the plan. You’ll also have to cover accrued interest and penalties until you’ve paid your balance in full.
Make sure to keep a copy of the balance due letter for your records; you may need it later to show to the IRS or your tax consultant.
Nobody enjoys finding an IRS letter in their mailbox. If the IRS sent you one of these notices, don’t simply toss it in the recycling bin or ignore it. It’s better to call a tax consultant who can help you make sense of the notice and work out a payment plan for you.
If you owe a large amount, your tax consultant may be able to request an extension, which could give you more time to pay. They can also represent you if the IRS chooses to audit your tax return.
Finding IRS balance due notices in the mail can be stressful, especially if you’re unsure how you’ll pay what you owe. If you need guidance on how to handle your balance due notice, call Levy & Associates Tax Consultants in Lathrup Village, MI, at (313) 367-0985. For our Delray Beach, FL, location, call (561) 933-6705.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.