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How IRS assortment notices work
Typically, CP14 is the primary IRS discover for an unpaid tax stability, adopted by three or 4 reminder letters, each 5 weeks, defined Darren Guillot, nationwide director at Alliantgroup, who beforehand served as IRS deputy commissioner of the company’s small enterprise division.
It’s attainable many taxpayers solely acquired that first letter earlier than the IRS paused automated assortment notices, he stated.
However, the company is waving roughly $1 billion in late-payment penalties for thousands and thousands of taxpayers with balances below $100,000 from returns filed in 2020 and 2021. The reduction is computerized, however late-payment penalties for unpaid balances from 2020 and 2021 will resume April 1, 2024.
How to reply to IRS letter: ‘You cannot bury your head’
While late-payment penalty reduction may be welcome information for taxpayers with debt from 2020 or 2021, you continue to want to repay these balances.
“You cannot bury your head and faux it’s going to go away,” Guillot stated, emphasizing the significance of responding to assortment notices promptly to keep away from additional enforcement actions.
“The overwhelming majority of taxpayers can arrange a payment plan for themselves” by scanning a QR code on their IRS discover, he stated.
The overwhelming majority of taxpayers can arrange a fee plan for themselves.
Darren Guillot
National director at Alliantgroup
If you owe $50,000 or much less, together with tax, penalties and curiosity, you possibly can arrange a long-term payment plan online. You may also arrange a short-term fee plan, 180 days or much less, on-line for lower than $100,000 in mixed tax, penalties and curiosity.
“The on-line installment fee software is simply implausible,” stated Phyllis Jo Kubey, a New York-based enrolled agent and speedy previous president of the New York State Society of Enrolled Agents. “I exploit that on-line installment settlement on a regular basis for my shoppers.”
If you select the month-to-month fee choice and choose a very small quantity, resembling $2, for instance, the system will default to the minimal month-to-month fee it is going to settle for in your stability, she stated.
Kubey usually urges shoppers to contract for the minimal month-to-month fee and then pay additional if they will afford it. “It’s tremendous handy,” she added.
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