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Category Archives: IRS Certified Mail

Why did I get a Final Notice of Intent to Levy via Certified Mail?

All IRS Back Tax Help comments are in blue.  This post is about the IRS Final Notice of Intent to Levy (IRS Letter 1058, IRS Notice CP 91, IRS Notice CP 298, IRS Notice CP 90, IRS Notice CP 297, & IRS Notice CP 504) and what the differences are between each.  Each type of Intent to Levy are addressed in individual posts as well. 

If you know you need to take action, read my thread about whether or not you should hire someone (You shouldn’t automatically) titled “Owe the IRS Back Taxes?  When, Who, and How to Hire IRS Back Tax Help” before you do anything else.  

As usual, if you like the tone of these posts, contact me for consultation.  I can be reached at irsbacktaxhelp@gmail.com.  Before you email me, please click on and read “About IRS BACK TAX HELP”.

IRS Letter 1058:

  • The IRS Letter 1058 exposes all of your assets to seizure.  Bank accounts, client receivables, & property can all be taken 30 days after this letter is sent out.  It also means the IRS is actively looking for your assets so they can levy when they feel it’s appropriate.  It also notifies you that they may file federal tax lien. 

http://www.irs.gov/individuals/article/0,,id=185720,00.html

IRS Notice CP 91 & CP 298

  • The IRS Notice CP 91/298 exposes 15% of you Social Security Benefits to seizure.  The IRS can take no more than 15%.

http://www.irs.gov/individuals/article/0,,id=136852,00.html

IRS Notice CP 90 & CP 297

  • The IRS Notice CP 90/297 is a catchall that is typically sent out after you have defaulted on an installment agreement.  “any federal payments due you, such as contractor/vendor payments, OPM retirement benefits, SSA benefits, salary, or employee travel advances or reimbursements because you still have a balance due on your tax account. Property, or rights to property, such as real estate, automobiles, business assets, bank accounts, wages, commissions, and other income are also subject to levy. It is also telling you that we may also file a Federal Tax Lien, if we have not already done so.”  People are always surprised to find out they can take SSA and 401k assets.  They mean business. 

http://www.irs.gov/individuals/article/0,,id=136851,00.html

IRS Notice CP 504

  • The IRS Notice CP 504 is a precursor to all the actual types of Final Notice of Intent to Levy.  If this is the only letter you have received, and no other letters have been sent via IRS certified mail, it also means you have more than 30 days to prepare. 

http://www.irs.gov/individuals/article/0,,id=234674,00.html

All of these Final Notices of Intent to Levy can be diffused.  But you must take action to make that happen.  Obviously, receiving any of these IRS letters or notices is a problem.  It means things are spinning out of control and you need to make dealing with the IRS a priority.  These IRS notices are a warning that they are going to make it your number one priority by making it very difficult to run your business or work in 30 days.  Sometimes the IRS does not take levy action on day 31, which lulls people into a false sense of security.  Do not let this happen to you. 

How does an IRS tax lien or IRS bank levy affect my credit?

All IRS Back Tax Help comments are in blue.  This post is about IRS Notice of Tax Lien (IRS Form 668) and the IRS Final Notice of Levy and their effect on your credit score.  If you have questions about an IRS bank levy, an IRS Federal or State Levy program action, how to get an IRS levy released or returned, Please search the blog for related posts.

If you know you need to take action, read my thread about whether or not you should hire someone (You should not automatically) titled “Owe the IRS Back Taxes?  When, Who, and How to Hire IRS Back Tax Help”  Before you do anything else.  

As usual,  If you like the tone of these posts, contact me for consultation.  I can be reached at irsbacktaxhelp@gmail.com.  Before you email me, please click on and read “About IRS BACK TAX HELP”.

How does an IRS tax lien or IRS bank levy affect my credit?  

Answer for IRS tax lien:  We have had our clients tell us that it drops the credit score from 50-100 points.  If you have a tax lien filed against you by the IRS, the IRS is required to send the “Notice of Federal Tax Lien” via certified mail to you last known address.  If you address is wrong, they are only required to attempt the delivery.  

Answer for IRS bank levy:  We have not heard of a drop in credit score after an IRS bank levy has occurred.  (If this has happened you should be seeking professional tax help.)  

Just received an IRS notice / letter. What should I do next?

All IRS Back Tax Help comments are in blue.  This post is about the IRS Notices or Letters you may receive in their collection effort if you owe back taxes.  The main IRS certified mail to be concerned about is listed below.  Other IRS notices and letters are discussed in the original post.  

If you know you need to take action, read my thread about whether or not you should hire someone (You should not automatically.) titled “Owe the IRS Back Taxes?  When, Who, and How to Hire IRS Back Tax Help”  

As usual,  If you like the tone of these posts, contact me for consultation.  I can be reached at irsbacktaxhelp@gmail.com.  Before you email me, please click on and read “About IRS  BACK  TAX  HELP.”

irs.gov link and original and full text:

http://www.irs.gov/individuals/article/0,,id=96199,00.html

Here are the IRS certified mail you need to worry about:

Letter 2357C Abatement of Penalties and Interest - This title is misleading.  This letter actually means they didn’t sound out the initial notices as they were supposed to, and this notice is served in lieu.  Enforced Collection is about to ensue, and the IRS “may file a levy on your wages or bank account or file a lien on your personal property.”  Time to take action.  
Letter 1058 (LT 11) Final Notice prior to levy; your right to a hearing - This is the letter that shows up after the letter discussed above.  Time is getting short.  You have 30 days from the date of this letter to take action to neutralize it.  If you do not, they may levy wages, bank accounts, receivables, or seize property.  This and the CP90/CP 297 are the brief calm before the storm.  It’s time to be proactive and take the fight to them.  
CP 90/CP 297 Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing - This is specifically focused “we intend to issue a levy against any federal payments due you, such as contractor/vendor payments, OPM retirement benefits, SSA benefits, salary, or employee travel advances or reimbursements because you still have a balance due on your tax account. Property, or rights to property, such as real estate, automobiles, business assets, bank accounts, wages, commissions, and other income are also subject to levy. It is also telling you that we may also file a Federal Tax Lien”
CP 297A Notice of Levy and Notice of Your Right to a Hearing - This means it’s too late, they have already acted.  You can act to take control, but you must react immediately.  “This notice is telling you that we issued a levy against any federal payments due you, such as contractor/vendor payments, OPM retirement benefits, salary, or employee travel advances or reimbursements because you still have a balance due on your tax account. We issued the levy without giving you an opportunity for a pre-levy hearing since you previously requested a hearing within the last 2 years.”
CP 91/CP 298 Final Notice Before Levy on Social Security Benefits - Most people don’t think the IRS can levy social security benefits, but they can and often do.  Again, you have to act to prevent this.  

What can I do to remove IRS penalty & interest? Can I get an IRS penalty abatement?

All IRS Back Tax Help comments are in blue.  This post is about IRS notices when you owe overdue 1040 personal income tax.

If you know you need to take action, read my thread about whether or not you should hire someone (You should not automatically) titled “Owe the IRS Back Taxes?  When, Who, and How to Hire IRS Back Tax Help”  

As usual,  If you like the tone of these posts, contact me for consultation.  I can be reached at irsbacktaxhelp@gmail.com.  Before you email me, please click on and read “About IRS  BACK  TAX  HELP”.

irs.gov link and original and full text here:  http://www.irs.gov/taxtopics/tc653.html

“If there is any money owed, you will be sent a bill. Generally, interest is charged on any unpaid tax from the due date of the return until the date of payment. The interest rate is determined quarterly and is the federal short-term rate plus 3 percent.”  Right now it’s 3%.  

“Interest is compounded daily. If you file on time but don’t pay all amounts due on time, you’ll generally have to pay a late payment penalty of one-half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or the 25% maximum penalty is reached. The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy.” To be more clear, in the first month it is .5% penalty of the amount owed, in month two, 1%, in month three, 1.5% and so on…until it reaches 25% where it caps out.  Bear in mind that this is only one of the penalties they are charging you.  Typical growth rates including both IRS penalty and interest is 20-25% for the first year, then 40% in year two.  Your total liability doubles in a little over two and a half years, and that’s why it’s so important to attack your liability in the best way possible.  Agreeing to an IRS pay plan on the Revenue Officer’s terms is literally like agreeing to a loan at 40% for 2-5 years.  You would never agree to those rates under normal circumstances.  There are ways to manipulate that growth rate in your favor.  

“If you owe tax and don’t file on time, the total late-filing penalty is usually five percent of the tax owed for each month, or part of a month that your return is late, up to five months.”  Here’s another 5% on top of the 25% above.  This penalty grows just like the one above, and why it’s important to get filed on time or as soon as possible if it’s already late.  Once that happens, this penalty is stopped.  

“You must file your return and pay your tax by the due date to avoid interest and penalty charges. Often the funds necessary to pay your tax can be borrowed at a lower effective rate than the combined IRS interest and penalty rate.”  This is absolutely true.  However, if your financial situation prevents you from getting a loan, or you cannot risk putting up collateral, (Like your home), do not pursue this course of action.  If it doesn’t make sense now or five years from now, don’t put yourself or your assets in jeopardy of IRS levy or seizure.  IRS Installment Agreements, Offers in Compromise, or Partial Payment Installment Agreements can serve your purpose equally well.   

“The penalties for filing and paying late may be abated if you have reasonable cause and the failure was not due to willful neglect. If you’re billed for penalty charges and feel you have reasonable cause, send your explanation along with the bill to your service center, or call the IRS at 800-829-1040 for assistance.”  You can abate penalty that has accrued.  However they don’t mention that you must complete and IRS Form 843 along with your “explanation”.  Using the form creates a paper trail and invokes your appeal rights.  Here is a direct link to the form:

Topic 653 – IRS Notices and Bills, Penalties and Interest Charges

http://www.irs.gov/pub/irs-pdf/f843.pdf

“Generally, interest charges are not abated; they continue to accrue until all assessed tax, penalties, and interest are paid in full. Generally, any reasonable cause exception to the penalty for failure to pay tax cannot be determined until the tax is first paid in full.”  Three things here.  

1.  “Generally”  Does it make sense to pay them every penny of the penalty and then ask them to return it?  No.  Always do it during the first year of an installment agreement.  

2.  You have three years from the point of paying penalty to fight for it.  So if you’re agreement is longer than three years, and you paid most of the penalty in the first year, no penalty abatement will occur.  These are the reason professional help makes sense.  The IRS system is indifferent, and typically, Revenue Officers don’t care to help with a penalty abatement.  

3.  Be wary of anyone who is telling you they can get IRS interest abated as well as penalty.  They either don’t know what they are talking about (worrisome) or they are intentionally misrepresenting what can be done (ill intentioned).  

Have there been any new changes to IRS Tax Lien Policies?

All IRS Back Tax Help comments are in blue.  This review is a further and more in-depth discussion on changes to the IRS tax lien filing policies including what the new dollar thresholds for filing an IRS tax lien, speeding up the time it takes to get a tax lien removed, and getting an IRS tax lien withdrawal once you’re in a direct debit IRS installment agreement.  

If you know you need to take action, read my thread about whether or not you should hire someone (You should not automatically) titled “Owe IRS back taxes?  When, who, and how do I hire IRS back tax help?”  Here’s the link:

http://irsbacktaxhelp.wordpress.com/2011/10/31/owe-the-irs-back-taxes-how-do-i-hire-irs-back-tax-help/

 As usual,  If you like the tone of these posts, contact me for consultation.  I can be reached at irsbacktaxhelp@gmail.com.  Before you email me, please click on and read “About irs back tax help”.

Here is the link to irs.gov:

http://www.irs.gov/businesses/small/article/0,,id=239095,00.html

#1.  Increase in the IRS tax lien filing threshold

“The Fresh Start changes increase the IRS lien filing threshold from $5,000 to $10,000… The IRS will not retroactively apply the new $10,000 lien filing threshold and automatically withdraw a previously filed lien.”  We have seen no change to the IRS’ actual behavior in this regard.  We continue to see IRS tax lien filings well below these levels for both overdue 941 payroll tax as well as 1040 income tax.  After the date of this announcement, it is enforceable depending on circumstances.  

#2.  Requesting an IRS tax lien withdrawal after the tax lien has been released

“The IRS may now issue a withdrawal of a filed Notice of Federal Tax Lien after the lien has been released. If you wish to have the Notice of Federal Tax Lien withdrawn, you must request the withdrawal in writing. Please use Form 12277, Application for Withdrawal, (PDF). In item 8, Reason for requesting withdrawal, check box d, the best interest provision.”  Please note they say you “must” request the IRS tax lien withdrawal.  You cannot trust they will get this done on their own.  I have encountered more than one person who was astounded to find out the lien was in place years after they settled their IRS back tax debt.  Make sure you keep copies and send the application for tax lien withdrawal certified.  

#3.  Tax Lien withdrawal after entering into a Direct Debit installment agreement

“If you are a qualifying taxpayer and meet the eligibility requirements, you may have your lien withdrawn after entering into a Direct Debit installment agreement. Your request for lien withdrawal must be in writing. Please use Form 12277, Application for Withdrawal (PDF). In item 8, “Reason for requesting withdrawal,” check box b, the “entered into an installment agreement” provision.”  This is the biggest news in our industry in years.  The IRS used to never remove a tax lien unless it was their mistake, we proved the lien was poorly perfected, or paid in full.  This option is available for individuals that owe 1040 income tax, businesses that owe income tax (not over due 941 payroll tax) , and out of business companies with any type of tax.  

In order to qualify you must owe $25,000 or less, have everything paid off in 5 years or less or prior to the statute expiring, all your filings are complete, and you have never defaulted on a direct debit installment agreement previously.  

If you’re already in a regular IRS installment agreement, you are allowed to convert to a direct debit installment agreement as long as you meet all of the conditions above.  Here’s the IRS phone numbers you’ll need:  

Individuals (Wage & Salary Earners) 1-800-829-0922
Individuals (Self-Employed) 1-800-829-8374
Businesses 1-800-829-0115

As I’ve mentioned in other posts, if you owe $50,000 or more, or the IRS’ actions are not making sense, get some professional help.  Contact me and I will give you some guidance or encourage you to hire me depending on what will help you the most.  

Owe IRS back taxes and now receiving certified mail? It’s time to act.

All IRS Back Tax Help comments are in blue.   This review is about IRS certified mail and the questions that surround it.  The short version is this:  If you owe IRS back taxes and you are receiving IRS certified mail, it’s time to act.  Now.  Read the questions and answers to learn more about what the IRS’ intentions are when you start to receive the orange slips in your mailbox.

As usual, If you like the tone of this writing, I would like to refer you to someone who meets irs back tax help criteria.  Please contact irs back tax help.  Before you email me, please click on and read “About irs back tax help.”

IRS Certified Mail, LT11, IRS Letter 1058, IRS Form 668y, Final Notice of Intent to Levy, and Notice of Federal Tax Lien

I have received a slew of emails about IRS certified mail and what it means.  My shortened responses are below:  

Q:  I’ve broken an IRS payment arrangement (IRS installment agreement), now I’m getting certified mail from the IRS.  What should I do?

A:  The first step is communication with the IRS.  If you have defaulted an installment agreement, simply call the Revenue Officer and ask to reinstate it.  If you cannot get the installment agreement reinstatement done, it is time to consider getting some help for your back taxes.  

The other question is this:  Why did you default the installment agreement?  

If you were in an IRS installment agreement, and you could not afford it, it is usually because you did not think you had any options to solve your tax problem other than what the IRS offers you.  You do.  There is always a reasonable solution to these tax problems.  If you could not get an IRS installment agreement that you could afford in the first place, it means you don’t know what you don’t know.  It does not mean you are dumb, it means you are inexperienced in these matters going up against a highly trained collection agent.  You can balance those scales by getting IRS back tax help.  

Q:  Do I need a tax attorney for an IRS Final Notice of Intent to Levy letter?  (IRS letter 1058, LT11)

A:  Yes.  That is not a popular answer, but it is probably true.  If the IRS collection efforts have gotten to the point where they are threatening to seize property or bank accounts through levy, it truly means you are losing control of the situation.  The IRS Final Notice of Intent to Levy means business, and as it is worded, it is the final notice.  They are at the gates.  The threat of IRS seizure can be nullified, but you must take action.  If you have already experienced an IRS bank levy, or garnishment, you now need help.  You can get an IRS bank levy returned to you, but you must act quickly and forcefully to make that happen.  

Q:  I owe back taxes, and I’m now receiving IRS certified mail.  How much time do I have before they levy?

A:  If you have received more than one certified letter from the IRS, note the date of the first letter.  The key is the date on the certified letter itself, not the date it was received or picked up (signed for, more on that later.)  In the IRS Letter 1058 “Final Notice of Intent to Levy” it says you have 30 days to act or be under threat of seizure.  You must respect this.  If you are approaching day 30 and have taken no steps to protect yourself, maintain a very low financial profile.  The IRS could take seizure action on day 31 or day 331, but it will be you that is trying to repair employee and client relationships when checks start to bounce.  

Q:  I’ve received certified mail from the IRS, should I worry about perjury?

A:  Odd question.  Perjury typically comes into play with the IRS Collection Information Statement (IRS Form 433a or IRS Form 433b)  Maybe they meant when they file a Collection Due Process Appeal (CDP) (IRS Form 12153)  Perjury isn’t really an issue, but don’t make things up.  Make sure you file a CDP within the first 30 days to prevent an IRS bank levy prior to the hearing.  If you have representation, and you have had an IRS levy or garnishment, check and see if a Collection Due Process Appeal was filed.  If they cannot produce the CDP appeal with a verified date, that is a red flag that you are not being taken care of properly.  Get a second opinion (that’s a hint!) if that has happened.  

Q:  How many IRS certified letters or notices is one given prior to IRS tax liens?

A:  No IRS certified letters are required prior to the IRS filing a federal tax lien.  If you are receiving certified mail prior to a tax lien, it is probably an IRS letter 1058, Final Notice of Intent to Levy.  Which is worse because your assets become exposed to seizure.  Time to get moving.  

Q:  I owe $15000 in back taxes, received an IRS certified letter, what now?

A:  Time to take action, but don’t hire anyone, yet.  If you owe under $50k to the IRS I always encourage people to try to tackle the IRS tax problem on their own first.  Read:   Owe IRS back taxes? When, who, and how do I hire IRS back tax help? to find out if you should hire IRS back tax help.  It’s not just self promotion, honestly. 

Q:  I’ve received an IRS certified letter Final Notice of Intent to Levy, will they really seize my property?

A:  Yes.  The IRS can and will seize a home, bank account, 401k, property, anything with equity to solve the IRS back tax problem.  I’m amazed at how many people I talk to do not take this threat seriously until it is too late.  They send these IRS Letter 1058s (aka LT11) out when they mean business.  IRS bank levies, and IRS wage garnishments occur thousands of times a day.  They have no problem damaging your relationships with spouses, employers, employees, clients, and anyone else these seizures can affect.  

Q:  What letters and notices does the IRS send certified?

A:  The IRS letters and notices you must take seriously.  They send them certified for a reason.  A clock is ticking and they have deadlines with them.  No one likes to get letters from the IRS, but force yourself to pick up those letters, open them, and read them.  Twice.  Better the devil you know…  You must plan your defense when IRS certified mail starts to arrive.  Typically the letters sent via certified mail are the IRS Final Notice of Intent to Levy, (IRS Letter 1058, LT11) and the IRS Notice of Federal Tax Lien Filing (IRS Form 668y.) 

Q:  What do I do if an IRS Federal Tax Lien (IRS Form 668y) was filed but I didn’t sign certified notice?

A:  The same thing you do if you did sign for it.  The IRS is only required by law to attempt to notify you.  Old address? Doesn’t matter.  Out of town?  Doesn’t matter.  This is one of the reasons it is so important to have someone represent you.  If you hire the right IRS back tax help, they will not miss those letters, and they will not let bad things happen to you.  The bottom line is IRS certified mail means things are rapidly getting out of control, and you need to do something.  Whether it’s taking action on your own or hiring someone to help.  IRS back tax problems only get worse the longer they go unattended.  

Not happy with IRS back tax results?  

If you feel like you are on the wrong side of all these statistics, it is probably worth seeking a second opinion.  If you would like irs back tax help to be your first or second opinion, I can be reached at irsbacktaxhelp@gmail.com.  I do not pressure people in an already stressful situation.

Regards,

irs back tax help


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