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Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 3477
Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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I received a certified letter from the irs. I don't know what

Customer Question

I received a certified letter from the irs. I don't know what it is yet. We owe 70,000 to them and can't pay all of it. We need to pay 20,000 but can only pay 10,000 right now. I don't know what to do.
Submitted: 2 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 2 years ago.
Welcome. Thank you for choosing us to assist you. My name is ***** ***** my goal is to help make your life, a little... less taxing.
When you write that you need to pay $20,000, does this mean that you have already set up an installment agreement with the IRS? If not, that's what you want to do, sooner, rather than later. In addition, it would be in your best interest to pick up the letter. More than likely it is a notice to indicate to you that they are about to take some kind of action against you. That action could be filing a tax lien, levying your bank account and/or wages. I am certainly not trying to scare you, but it is important for you to get the letter. Knowing IS 1/2 the battle. Assuming what the letter could be about is likely not going to do anything other then stir up anxiety.
Customer: replied 2 years ago.
We had an installment agreement with them that we always paid on time. The irs ended it on Dec. 31st 2014. We needed to pay 20,000 by April 15th in order to keep the balance under 50,000 and set up a new payment plan with them. We were only able to save 10,000. What happens if you can't pay all that they demand but pay some of it?
Expert:  Tax.appeal.168 replied 2 years ago.
Hello again,
Q: What happens if you can't pay all that they demand but pay some of it?
A: Well, in most cases they will try to work with the taxpayer if they see that the taxpayer is making an effort to pay the tax. However, as you have a large tax balance, their intent is probably file a tax lien, levy your bank account, or both. My suggestion is schedule an appt. with a supervisor as soon as possible. Let them know that you have $10,000 that you can pay now. At this point, if I were you, I would not keep large balances in the bank account. SEE BELOW:
Taxpayers who owe, but can’t pay in full have several options for meeting their tax obligations. They can use the Online Payment Agreement application on IRS.gov if you owe $50,000 or less in combined tax, penalties and interest to request an installment agreement and receive an immediate notification, if they approve the request. An installment agreement allows you to make payments over time rather than paying in one lump sum. If you owe more than $50,000 you may still qualify for an installment agreement, but you will need to complete a Collection Information Statement, Form 433F. Otherwise, contact the IRS to discuss your payment options at 1-***-***-****.
REFERENCE SOURCE:
http://www.irs.gov/pub/irs-pdf/p4849.pdf
You want to head them off at the pass if you can because if they file a lien or levy your bank account and/or wages, that will be a problem.
Let me know if I can be of further assistance to you regarding this matter.
Customer: replied 2 years ago.
I don't have a large balance in our bank account now...I do have the $ to pay some of that bill in there plus some extra for my bills. The letter came today and I wasn't home. Should I take the $ out of my bank account now or try to resolve it on Monday first? Can they levy after a first letter?
Expert:  Tax.appeal.168 replied 2 years ago.
Hello again,
Q1: Should I take the $ out of my bank account now or try to resolve it on Monday first?
A1: Check your bank balance tomorrow. If your funds are still there tomorrow, for now you are good. However, if the IRS did send a notice to levy the bank account, the bank could receive it tomorrow and freeze the funds in the account. I don't want to tell you to rush and take the money out, but I have had clients that have had their bank accounts drained by the IRS. Coincidence or not, it seems that banks usually receive levy notices towards the end of the week.
Q2: Can they levy after a first letter?
A2: They usually send a Demand for payment notice and if that is ignored, they send a Final Notice of Intent to Levy. If this is your first notice, you're likely okay. The letter is probably a Demand For Payment Notice. SEE BELOW:
We usually levy only after these three requirements are met:
We assessed the tax and sent you a Notice and Demand for Payment;
You neglected or refused to pay the tax; and
We sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. We may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested. Please note: if we levy your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.
REFERENCE SOURCE:
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Levy