You open your mail box and there is an IRS letter. Every time you receive an IRS letter, you get a nervous feeling in your gut. Especially, if you receive a certified IRS letter. You start reading the IRS letter and realize you have no idea what the IRS is telling you. All you see is taxes, interest, and penalties. What do you do?
The first step you can take is downloading a FREE copy of the IRS Letter Decoder. Click here to get the IRS Letter Decoder. There are nearly 50 different types of IRS letters explained in the IRS Letter Decoder. This is a useful tool for people that are looking to understand their tax problem.
Michigan Business Network – IRS Letter Decoder
There are many different types of IRS letters. Most IRS letters have a Notice number listed on the top right hand corner of the letter. With your IRS letter in hand, you can find more information about the letter in the IRS Letter Decoder. The IRS Letter Decoder answers questions such as: Why are you receiving this IRS letter? What should you do? What can you expect next?
IRS Letter Decoder Use Example
For example, one of the scariest IRS letters is titled “Notice of Intent to Levy your State Tax Refund or Other Property.” The Notice number for this IRS letter is CP504. You can look up CP504 IRS letter in the IRS Letter Decoder to read more about this specific letter.
According to the IRS Letter Decoder, IRS letter CP504 is sent to people that have not paid their back taxes or set up an agreement with the IRS. The IRS sends the CP504 letter after sending several tax bills. The IRS Letter Decoder recommends either the IRS or a tax professional be contacted immediately. Failure to act will result in the IRS taking enforcement action such as filing federal tax liens and/or tax levies on wages, bank accounts, state and federal refunds.
The IRS Letter Decoder says there are still several options for resolving the taxes before the IRS takes drastic actions. This includes paying the balance in full or setting up an arrangement with the IRS. A call can be made to the IRS to request more time to evaluate options available. The IRS will ask for information such as place of employment, bank used and if the business has any government contracts. This information is requested to update the IRS system for potential levy sources.
We recommend downloading the IRS Letter Decoder if you have issues with the IRS and want to learn more about the IRS letters being sent to you.