After the COVID-19 pandemic halted certain tax collection activities, the Internal Revenue Service is resuming compliance actions. As of June 2023, the agency is sending out millions of IRS balance-due notices, including CP14 notices, plus lien and levy notices. Learn more about this topic and how it impacts your personal taxes.
COVID-19 Emergency Declaration: An Unprecedented Pause
The onset of the COVID-19 pandemic brought emergency restrictions to IRS collection activities. In 2022, accounts with outstanding balances were put on hold, giving millions of taxpayers a break from regular payments to file for returns. The current mailing of balance-due notices lifts the temporary pause and requires Americans to pay the remainder of their unpaid taxes.
Understanding IRS Balance Due Notices
If the IRS targets you for unpaid taxes, you’ll likely receive a CP14 notice. This notice provides a full breakdown of how much you owe and your options for payment. You’ll find a due date for payment on this notice, and failure to pay off the balance by that date will force the IRS to charge interest.
It’s essential to make an effort to pay since the IRS could then follow up by filing a Notice of Federal Lien. This action kicks off a series of mailed notices requesting your payment before they must enforce your balance collection. Take any collection notice seriously and consult a tax service professional for guidance.
How To Make Meaningful Payments
Tax professionals recommend responding to IRS balance-due notices immediately to avoid accruing additional interest and hefty penalty fees. If you receive a CP14 notice, it will contain all the information you need regarding payments, including:
- The payment due date
- The total amount you owe
- Instructions for mailing a check with your payment
Your notice will also provide contact information for you to reach out to the IRS. Call them if you are unsure why you’re receiving a notice or to establish a different payment plan.
Other Options Available for Taxpayers
If you are struggling to make immediate payments but intend to pay off your balance in full, you can file an extension with the IRS. Taxpayers have the option of filing a free 180-day extension. This short-term payment agreement gives you more time and flexibility to pay off your balance without penalty.
You can establish a payment plan with the IRS if you prefer to pay in smaller increments. Many taxpayers choose this option, though remember it will cost you an initial fee. The amount you owe to start a payment plan will depend on how long you plan to make payments and your outstanding balance.
The final option focuses on taxpayers who can’t take care of their balance through immediate payment, a short-term extension, or a payment plan. If this applies to you, you can explore a temporary not-collectible status or tax settlement. Tax professionals can help you determine the right course of action for your financial status.
Work With Qualified Tax Consultants If You Receive IRS Balance-Due Notices
The knowledgeable staff at Levy & Associates Tax Consultants are here to help you make sense of your IRS balance-due notices. Our helpful team consists of tax attorneys, former revenue officers, and certified public accountants, so we know how to approach any tax issue properly. With our guidance, tax season will become simpler, and you can avoid penalties and make a plan for future tax return filings.
Reach out to Levy & Associates Tax Consultants if the IRS targets you for unpaid taxes. Call the office nearest you for effective tax solutions. Contact us at (561) 933-6705 (Delray Beach, FL) or (313) 367-0985 (Lathrup Village, MI).