Never Ignore These Three Common IRS Notices

Any letter from the Internal Revenue Service (IRS) is likely to get your attention, but these three letters should prompt you into swift action.

Every year, the IRS mails more than 200 million notices to taxpayers. There are more than 1,000 different types of notices; and, they can serve many purposes. Some notices request additional information or payments from you; some inform you about an audit or ask questions about your tax return (called “compliance” notices); and some simply provide you with additional information.

Any compliance notices or requests for information should be dealt with right away. For any notice requesting action or information, it is critical to respond to the IRS timely to avoid more problems in the future.

Here are three common compliance notices that indicate your situation is about to get complicated if you do not address the notice right away:

CP3219/LT3219, Statutory Notice of Deficiency

In this notice, the IRS is saying that you owe additional taxes on your tax return(s). If you receive this notice, you usually have one of three issues:

• An audit
• An underreporter notice (also called a CP2000 notice, which the IRS sends to you when your tax return does not match income information the IRS has on file for you)
• An unfiled return investigation.Before you receive the CP3219/LT3219, you should have received several other notices proposing additional taxes. This is a “statutory” notice required by law. It allows you one last chance, within 90 days, to protest the additional taxes the IRS says you owe without having to pay the tax first. This notice can be scary for many people because it arrives by certified mail and indicates that the only way you can now contest the taxes is through the U.S. Tax Court.

  CP3219/LT3219 notices often happen when the IRS conducts an audit by mail (as opposed to an in-person audit). The IRS will also send you a CP2000 notice. These are the two most likely ways the IRS will challenge your tax return. However, in these cases, there are options called audit reconsideration/CP2000 reconsideration.

  L1058/LT11, Final Notice of Intent to Levy

  This notice means that the IRS is no longer politely asking for payment. Your case has been sent to the IRS Collection Unit to enforce collection through a lien or levy. A series of letters precedes this notice (CP14, CP501, CP503 and CP504) – all of which request that you pay your tax bill or make other arrangements with the IRS, such as an installment agreement or an extension to pay. The IRS sends this notice certified mail and gives you 30 days to make a payment agreement with the IRS or be subject to a levy. When the IRS issues levies, it most commonly takes funds directly from your bank account or paycheck.

  The L1058/LT11 also provides you with the ability to get an independent review of your situation from an IRS appeals officer if you file the request within 30 days of the date of the letter (use Form 12153). The appeals officer can allow you to set up a payment agreement with the IRS or even contest the taxes and penalties if you have not already done so.

  Here is another notice that you should never ignore: the potential identity theft notice.
  Letter 5071C – Request to Verify your Identity

  The IRS gets more than 3 million suspicious returns every year. This letter means that the IRS suspects someone has stolen your identity and fraudulently filed your tax return. The IRS sends you this letter as part of its process to prevent someone from receiving a fraudulent refund under your name. The notice should prompt you into immediate action.

  The letter instructs you to go to special website or to call a special phone number to verify your identity. Once the IRS asks you a series of questions to verify your identity, you can confirm whether you filed the tax return in question. If you did not file the tax return, the IRS can help you further protect your identity and process your real return. If you did file the return, it will take about six weeks for the IRS to process it and issue your refund.

  Each of these three notices requires immediate action. Not effectively addressing the issue can cause more problems in the future, such as the IRS taking your tax refunds and issuing levies. Use the IRS notice as a guide, but JV LAW GROUP can help you understand your options and help you effectively address the underlying issue.

  Please feel free to contact us today at 714-752-3270 or send us an email info@jvlawgroup.com.