The Internal Revenue Service (IRS) is a United States federal agency responsible for collecting taxes and enforcing tax laws. This is why most, if not all people, have known and transacted with the IRS.
Sometimes, the IRS reaches out to individuals and businesses to enforce the country’s taxation rules. But before you start looking for IRS debt relief solutions, it is best to understand what the notices mean.
The primary mode of communication that the IRS uses to reach out to taxpayers is through a mailed letter. The U.S. Postal Service delivers the letter to the taxpayer’s registered address. An IRS agent or compliance officer may call a taxpayer after receiving the letter.
Phone conversations often revolve around appointment confirmations or items for scheduled audits. Agents may also visit taxpayers, but they will notify them beforehand. Before admitting them into your home, ask them to present their personal identity verification credential or pocket commission.
Beware of scams and fraudsters who will pose as IRS representatives. Always remember that the agency will not communicate via email, text message, or social media. The IRS will never request credit card information, wire transfers, gift cards, and prepaid debit cards. The agency will not demand immediate payment nor threaten to bring in local police to arrest people or revoke immigration statuses or licenses.
Types of IRS Letters
There are different types of letters that the IRS may send taxpayers. Here are some of them.
CP521: Installment Payment Due
CP521 letters are notices of an upcoming installment payment due. The letter contains the due date, the amount you need to pay, and ways to settle the payment. Responding to the letter means paying your dues before the deadline.
CP180 or CP181: Unprocessed Return Due to Missing Schedule or Form
CP180 or CP181 is a notice that your recent tax return cannot be processed. One of the most common reasons for unprocessed returns is missing forms and schedules. You need to download the required documents, accomplish them, and mail them back to the IRS as soon as you can to address this.
CP501, CP503, and CP504: Notice of Balance Due, Follow-Up, and Final Notice
CP501 is a notice informing you of an unpaid balance you have. If the balance is not settled and you have failed to communicate with the agency, you will receive a CP503 notice.
In case you did not settle the balance past the due date, you are likely to receive a CP504 final notice. The letter itemizes the consequences of not paying your tax dues and gives you about thirty days to settle the amount. If you have issues with the balance, you may consider speaking with tax debt relief specialists.
CP44: Notification of Refund Delay
The IRS issues tax refunds when you overpay your taxes due to tax deductions, tax claims, and the like. Tax refunds are usually applied to your outstanding tax balance.
Before the agency can release your refund, they will first end a CP44 notice informing you of a delay in your tax refund. The delay is necessary to give the agency time to review your returns, double-check the applicability of the refund, and assess if you have other tax dues.
The IRS sends letters to enforce tax laws and remind people of their tax obligations. However, understanding how the IRS communicates with taxpayers and what their notices mean can help people steer clear of scams and fraudsters. However, if you are having trouble understanding IRS communication and notices, it is in your best interest to get in touch with a tax resolution specialist.
Axiom Tax Resolution Group is a company that offers reliable tax relief solutions in Birmingham, AL. When you need assistance in deciphering IRS notices or need IRS debt relief, we are the people for you. Schedule a consultation today!