Abboud Tax Law

When taxpayers receive a notice from the IRS, it often brings confusion and stress. Each IRS notice serves a specific purpose and includes critical information about your tax status. Knowing what these notices mean and understanding the associated deadlines is essential to protect your rights and avoid unnecessary penalties or escalated actions.

1. CP2000 Notice: Proposed Changes to Your Tax Return

• What It Means: The CP2000 notice is sent when the IRS identifies discrepancies between the income and/or payment information reported on your tax return and what third parties (e.g.,      employers or financial institutions) report to the IRS.
• Key Deadlines: Taxpayers usually have 30 days from the notice date to respond with either agreement or disagreement.
• Impact on Your Rights: If ignored, the IRS may proceed with the proposed changes, which could result in additional taxes, penalties, and interest. Timely response is crucial to dispute any errors and prevent an automatic assessment of the proposed tax.

2. CP504 Notice: Urgent Notice of Intent to Levy (Unpaid Taxes)

• What It Means: This is a final reminder notice sent when taxes are past due. It warns that the IRS may seize (levy) your assets if the balance remains unpaid.
• Key Deadlines: Taxpayers typically have 30 days from the date on the CP504 notice to pay or make arrangements before the IRS may escalate collection actions.
• Impact on Your Rights: If not addressed, the IRS can issue a levy on your state tax refund or pursue other collection activities. Responding promptly can prevent escalated actions like wage garnishment or bank levies.

3. CP90/Letter 1058: Notice of Intent to Levy and Notice of Your Right to a Hearing

• What It Means: The CP90/Letter 1058 is a critical notice alerting taxpayers of the IRS’s intent to levy assets, such as wages or bank accounts, and informing them of their right to request a hearing.
• Key Deadlines: Taxpayers have 30 days to request a Collection Due Process (CDP) hearing, which temporarily halts the IRS’s collection activity until the hearing is completed.
• Impact on Your Rights: Ignoring this notice could result in the IRS seizing assets. Responding within the 30-day window allows you to request a hearing, providing an opportunity to resolve the debt or negotiate terms before the IRS takes action.

4. CP14 Notice: First Notice of Balance Due

• What It Means: This is the initial notice informing you of a tax balance owed for the year. The CP14 typically provides details about the owed amount, including penalties and interest, and offers payment options.
• Key Deadlines: The IRS expects payment within 21 days of the notice date. If payment is not made, further notices may be issued, and penalties or interest may accrue.
• Impact on Your Rights: Although it is an initial notice, delaying payment or not setting up a payment plan can lead to additional notices and penalties. Early action helps you avoid additional complications.

5. LT11 Notice: Final Notice of Intent to Levy

• What It Means: Similar to the CP504, the LT11 is a serious warning from the IRS of impending collection actions. It gives taxpayers one final chance to resolve the tax debt.
• Key Deadlines: Taxpayers have 30 days to request a CDP hearing, which can postpone levy action until the hearing concludes.
• Impact on Your Rights: Ignoring this notice results in the IRS’s authority to levy assets. Requesting a CDP hearing is your best opportunity to explore resolution options before the IRS enforces collection.

6. CP501, CP503, and CP504 Notices: Escalating Requests for Payment

• What They Mean: These are part of a series of reminder notices, with each subsequent notice indicating greater urgency in resolving an outstanding balance. CP501 is a gentle reminder, CP503 is a second notice, and CP504 is the final reminder before enforced collection.
• Key Deadlines: Each notice typically provides 30 days to pay or make arrangements before receiving the next in the series.
• Impact on Your Rights: Ignoring these escalating notices can result in more serious actions, such as tax liens or levies. Addressing these notices early in the sequence can prevent the IRS from escalating to more severe measures.

Why It’s Essential to Respond to IRS Notices

Each IRS notice includes deadlines, and these deadlines are critical because they directly affect your rights. Missing a deadline can mean:

• Increased penalties and interest on your tax debt.
• Loss of rights to appeal or dispute the IRS’s actions.
• Escalation to enforced collection actions, such as wage garnishment, tax liens, or bank levies.

How to Protect Your Rights and Resolve Tax Issues

If you receive an IRS notice, prompt action is your best defense. Here are some steps you can take:

1. Read the Notice Carefully: Identify the type of notice, the issue, and the response deadline.
2. Gather Documentation: Collect any records needed to verify your tax situation or contest the IRS’s claims.
3. Seek Professional Help: Consulting a tax attorney can help you understand your rights, respond appropriately, and avoid costly mistakes.

Navigating IRS notices and the deadlines they impose can be complex and stressful. Working with a tax attorney ensures you have an experienced professional advocating for you, especially if you face a significant tax liability or a potential levy or lien. Don’t face the IRS alone—contact us to discuss your notice and learn how we can protect your rights.