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EDUCATE   ADVISE   PLAN

After you file your tax return and/or a final decision is made establishing your correct tax, the IRS records the amount in their  records. If you owe, they will send a bill for the amount due, including any penalties and interest. If you don’t pay or make arrangements to pay, they  can take actions to collect the debt.  If your bill is for an individual shared responsibility payment as a result of the Affordable Care Act, the amount owed is not subject to the failure to pay penalty, levies or the filing of a Notice of Federal Tax Lien. However, interest will continue to accrue and the Service may offset federal tax refunds until the balance is paid in full. 

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Why was I notified by the IRS?

The IRS sends notices and letters for the following reasons:

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  1. You have a balance due.

  2. You are due a larger or smaller refund.

  3. They have a question about your tax return.

  4. They  need to verify your identity.

  5. They need additional information.

  6. They changed your return.

 

Each notice or letter contains a lot of valuable information, so it’s very important that you read it carefully.

 

 If the IRS changed your tax return, compare the information they provided in the notice or letter with the information in your original return.

 

If your notice or letter requires a response by a specific date, there are two main reasons you’ll want to comply:

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  1. to minimize additional interest and penalty charges.

  2. to preserve your appeal rights if you don’t agree.

Tax Terms

Federal Tax Lien: A legal claim against all your current and future

property, such as a house or car, and rights to property, such as wages

and bank accounts. The lien automatically comes into existence if you

don’t pay your amount due after receiving your first bill.

Notice of Federal Tax Lien: A public notice to creditors. It notifies

them that there is a federal tax lien that attaches to all your current and

future property and rights to property.

 

Levy: A legal seizure of property or rights to property to satisfy a tax

debt. When property is seized (“levied”), it will be sold to help pay your

tax debt. If wages or bank accounts are seized, the money will be

applied to your tax debt.

 

Seizure: There is no legal difference between a seizure and a levy.

Notice of Intent to Levy and Notice of Your Right to a Hearing:

Generally, before property is seized, a notice is sent from the IRS.

 

Summons: A summons legally compels you or a third party to meet

with the IRS and provide information, documents or testimony.

 

Passport Actions: The Department of State will not issue or renew a

passport to any individual who has been certified by the IRS as having

a seriously delinquent tax debt, and may revoke a passport previously issued.

Unfiled Returns

Unfiled Returns

Penalties and interest are only added on unfiled returns if the taxpayer did not pay taxes by the April deadline. Taxpayers who did not file and owe tax should file a tax return and pay as much as they are able to now. If they cannot pay the full amount, they should learn about payment options and how to file back tax returns

 

How to File

Get all the information needed to file the past-due return.

 

Start by requesting your wage and income transcripts from the IRS. These transcripts will help you identify the Forms W-2 and 1099 that you will need to prepare your return. You can also order your account transcript to see any estimated tax payments or other credits posted to your account for that tax year.

Learn how to research your IRS account.

Gather information about self-employment, investments, and any other income that isn’t on file with the IRS.

Review your situation for deductions and credits.

If necessary, ask the IRS for more time to file the late return, to avoid any enforcement actions (such as a substitute for return, levy, or lien).

Identify any special processing needed for your late-filed return (such as date-stamping or filing with an IRS compliance unit).

If you have several past-due returns to file, the IRS normally requires that you file returns for the current year and past six years. But your specific facts and IRS rules will determine how far back you should file.

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