Received IRS Letter or Notice? Don't sweat.
The IRS has started issuing collection letters since the "end" of the COVID19 pandemic has arrived. Because of government overspending, the US Treasury is frantic in getting more funds into their bank account to pay obligations than ever before. The notices have started flowing in beginning with IRS Notice CP2000 which simply states that you have a tax balance due from a prior period. Many taxpayers ignore this letter so the IRS sends a followup, CP503. If this Notice is ignored, they will followup with yet another notice, CP14 or CP504. This notice will have the language that if you do not pay immediately they will levy and lien you accounts and property.
All these notices are for taxes that are due, according to IRS, from prior years. If you know you owe the tax but can't pay, there is a solution. If you owe $50,000 or less on your personal taxes plus penalties and interest, you can submit an installment agreement. The simplest way to do this is obtain an individual account from IRS (Obtain IRS Account HERE). It is best done on your smart phone since you will have to authenticate your identity through third party, like ID.me. Once you have successfully created the account, you can apply for a Streamlined Installment Agreement. If you have trouble with this, we can help. Call us at 208-935-1040. We can obtain the same data by other tools we have at our disposal.
If you owe business taxes, the streamlined agreement threshold is $25,000 or less including penalties and interest.
If you are an individual or business owner, make sure that you actually owe the tax before you agree to pay what the IRS Notice states. In all cases, when you do not report income for which you can deduct expenses, the IRS will not give you those expenses. They will just figure the tax on the gross amount. The burden will shift to you to show that you have eligible expenses that you can deduct to arrive at a lower tax. If you failed to file a tax return the IRS may prepare an SRF (Substitute For Return). They will send you an IRS letter explaining what they did and ask you to sign it if you agree to the stated tax. If you sign the document, you are stating that you agree and this will become your tax return for that particular period. DO NOT EVER DO THIS. While it's nice of the IRS to prepare the tax return on your behalf, they charge you for it and it can be expensive. For example, if you are entitled to any credits, in most cases, the IRS will not give you those credits when they prepare the tax return. You have to ask for those credits. You could be missing out on Child Tax Credit, Earned Income Credit, Savings Credit, Dependent Care Credit, Residential Energy Credit, or many other credits that taxpayers are entitled to if they qualify.
We deal with these IRS Notices and letters on a regular basis. Why not give us a call at 208-935-1040 and let us take a look at what it is the IRS is asking for? In most cases, we can save you several hundred to several thousand dollars but you won't know unless you allow our experienced eyes to examine the contents of that IRS Notice.
