I focus my practice on tax resolution, representing taxpayers in Colorado, Florida, and across the United States. In another week or two, the IRS will be issuing the first wave of several million “CP-14” notices. So what, you ask? Well, this is round one of many waves to come.
During the pandemic years, the IRS has refrained from unleashing the full release of these notices and collection activity. Now that the pandemic is over and the IRS is flush with $80 billion, it’s go time.
An IRS CP-14 notice is a letter issued by the IRS to notify taxpayers that they have an outstanding tax balance. The notice informs the taxpayer about the amount of tax owed, including any penalties and interest. This is a notice that taxpayers should not ignore.
If you receive an IRS CP-14 notice, the first thing you should do is carefully review the notice to ensure that all the information is accurate. If you believe that there is an error in the notice, you should contact the IRS immediately to request a correction.
If the information in the notice is correct, you should take steps to resolve the tax debt as soon as possible. The IRS offers several options for resolving tax debt, including payment plans, offers in compromise, and penalty abatement.
One option is to set up a payment plan with the IRS. This allows taxpayers to make monthly payments to the IRS until the tax debt is paid off. The IRS may also be willing to negotiate a reduced payment amount through an offer in compromise.
Another option is to request a penalty abatement. If you can demonstrate that you had a reasonable cause for not paying the tax on time, the IRS may waive the penalties and interest on the tax debt.
It is important to act quickly when you receive an IRS CP14 notice. Failure to respond to the notice can result in additional penalties and interest, and the IRS may take legal action to collect the tax debt. Now that they are flush with cash, they will be taking on a more aggressive approach.