What to do when the IRS balance-due discover arrives

A lot has been publicized concerning the IRS pausing a few of its compliance and assortment notices in 2022. Particularly, the IRS introduced that it might suppress many balance-due reminder notices till the IRS caught up on processing paper returns, correspondence, and different backlogged objects.

However tax professionals and their purchasers shouldn’t get too snug. The IRS can’t suppress about 9 million notices that exit yearly. These notices are the primary balance-due discover in a sequence of assortment notices. In IRS phrases, this discover is known as the CP14 discover and demand for tax. 

The CP14 discover is required by regulation (Inside Income Code Part 6303) to be issued inside 60 days after the IRS assesses the tax. The majority of CP14 notices present up at first of June (for 2021 returns, this date was probably June 6, 2022), asking for fee inside 21 days. 

This discover and demand letter units the stage for the IRS to implement assortment. If the taxpayer doesn’t reply to the CP14 discover with fee, the IRS can start the method to gather the taxes by levy or by submitting a discover of federal tax lien. Normally, the IRS will ship a sequence of reminder notices, referred to as the gathering discover stream, to ask for fee earlier than beginning enforced assortment.

What do you have to do in case your shopper will get a CP14 discover? 

First, don’t ignore it. It’s time to begin planning together with your shopper on the way to resolve the excellent tax steadiness. There are 5 IRS choices to think about, and so they every have professionals and cons. Your shopper’s circumstances will decide which possibility is finest.