If you have an outstanding tax debt, you can expect to receive an IRS notice in the mail at some point. These notices are the IRS’s way of letting you know they’re aware of your tax debt and will begin efforts to collect it.
The most common types of IRS tax notices are the following:
IRS Balance Due Notices
IRS balance due notices are exactly what they sound like — a notice that you have unpaid taxes that are due. There are several types of balance due notices you might receive, including:
You receive a CP11 notice when there’s a miscalculation on your tax return and you now owe the IRS after your return is adjusted. You can either pay the taxes you owe or contact the IRS by phone or mail within 60 days of your CP11 notice date to let them know you don’t agree with the changes.
You receive a CP14 notice when you owe the IRS money for unpaid taxes.
You can either pay the full tax amount you owe, set up an IRS payment plan to pay over time, submit an Offer in Compromise to settle for less than what you owe, or request Currently Not Collectible status to temporarily delay collection.
Read more on: Best Ways to Pay IRS Tax Debt
If you disagree with your CP14 notice when you receive it, call the toll-free number in the top right corner of the notice.
You receive a CP161 notice when you have an unpaid balance due to the IRS. This balance might be the result of unpaid taxes, an underpayment on your tax return, or interest and/or penalties.
If you think the IRS made a mistake when calculating the tax amount due, you must contact them within 10 days of your CP161 notice date.
You receive a CP501 notice when the IRS sees you have balance due for unpaid taxes. You can pay the balance due in full or in installments, or you can dispute your tax debt by calling the toll-free number printed on the notice.
If you owe the IRS and don’t pay the full amount you owe by the payment due date, the IRS will add additional interest and even a late payment penalty to your original tax balance due.
You receive a CP503 notice after the IRS has attempted to contact you about an unpaid tax debt and was unable to reach you.
You receive an LT16 notice when the IRS claims you either owe unpaid taxes or have failed to file tax returns in one or more years. You must respond to the LT16 notice to avoid possible IRS enforcement actions and collection efforts, including wage garnishment or a federal tax lien.
IRS Levy Notices / Tax Lien Notices
An IRS levy notice or tax lien notice makes you aware that the IRS plans to either place a federal tax lien on your assets to satisfy an unpaid tax debt or potentially seize your property via a levy. The types of levy notices and tax lien notices include the following:
You receive a CP504 notice when you have an unpaid tax debt and the IRS plans to move forward with levying your income, bank accounts or property if you fail to make payment arrangements.
If you disagree with your notice, contact the IRS as soon as you receive the CP504 notice to discuss it with an IRS representative.
CP90 Notice / CP297 Notice
You receive a CP90 notice or CP297 notice as the final notice of the IRS’s intent to levy. These notices explain the next steps the IRS plans to take to levy and collect your tax debt. You have 30 days to pay or make a payment arrangement.
If you disagree with your CP90 notice or CP297 notice, request a Collection Due Process (CDP) hearing to appeal.
CP91 Notice / CP298 Notice
You receive a CP91 notice or CP298 notice as the final notice of the IRS’s intent to levy a portion of your Social Security benefits — up to 15 percent — to satisfy an unpaid tax debt. You have 30 days to pay or set up an IRS payment plan when you receive a CP91 notice or CP298 notice.
If you have questions about your CP91 notice or CP298 notice, contact the telephone number on the notice and do not contact the Social Security Administration (SSA).
You receive a CP523 notice from the IRS when you have defaulted on an installment agreement for an unpaid tax debt. This notice informs you that the IRS is terminating your installment agreement and moving forward with more aggressive collection efforts, like a levy.
LT11 Notice / Letter 1058
You receive an LT11 notice or Letter 1058 when the IRS plans to seize your assets over nonpayment of an overdue tax debt. If you don’t pay or respond to your LT11 notice or Letter 1058, the IRS can levy wages, other income, bank accounts, cars and homes, Social Security benefits and more.
To appeal the tax balance due printed on your notice, you must request a Collection Due Process hearing.
Notice of Federal Tax Lien
You’ll receive a Notice of Federal Tax Lien when the IRS files a federal tax lien against your personal property.
Once the tax lien is in place, the federal government has a legal claim to your property, and when you go to sell it, the federal tax lien must be satisfied before you receive any proceeds from the sale.
IRS Private Collection Notices
The IRS sends a private collection notice to let you know that it has placed your unpaid tax debt with a third-party collection agency.
You receive a CP40 notice when the IRS assigns your tax debt to a private collection agency (PCA). This notice includes the name and contact information of the PCA with which your tax debt has been placed. You’ll also receive a letter from your assigned PCA.
Here’s a list of the private collection agencies working with the IRS: https://www.irs.gov/businesses/small-businesses-self-employed/private-debt-collection.
IRS Refund Notices (Refund Applied to Tax Debt)
The IRS sends refund notices when it applies part or all of your tax refund to satisfy a tax debt.
You receive a CP16 notice if the IRS amended your tax return because of a filing error or if the IRS plans to use some or all of your tax refund to pay your tax debt. Contact the IRS within 60 days of your CP16 notice date if you don’t agree with the notice.
If your refund was applied to your spouse’s tax debt, you may qualify for Injured Spouse Allocation.
You receive a CP49 notice after the IRS seizes some or all of your tax refund to cover your unpaid taxes. If the IRS only uses part of your tax refund, you’ll receive a check for the remainder.
When your seized tax refund doesn’t satisfy your full tax debt, there are a number of tax relief options that are available. You’ll need to set up an IRS payment plan or submit an Offer in Compromise. Call the IRS toll-free number on your CP49 notice if you disagree with the notice.
IRS Seriously Delinquent Tax Debt Notice (Revocation or Denial of Passport)
If your unpaid taxes are substantial enough (typically more than $50,000) and the IRS has had no luck collecting the tax balance due, the IRS will inform the U.S. Department of State that you have a “seriously delinquent” tax debt.
Your current passport can then be revoked or your new passport application can be denied.
You receive a CP508C notice when the IRS has referred your unpaid “seriously delinquent” tax debt to the U.S. Department of State in consideration for your passport to be revoked or your application for a passport to be denied. You must make arrangements to pay your tax debt in order to avoid passport denial or revocation.
Once you resolve your tax debt with the IRS, they will reverse the “seriously delinquent” certification within 30 days and update the U.S. Department of State that you paid your taxes.
How Can Wiztax Help?
We can look at all the options that are available to you and tell you exactly what the best path forward will be. For those that are eligible, for example, an Offer in Compromise will almost always be the better option.
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