I Just Received My Final Notice! Now What?

I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.

I told you before that the IRS has every intention to resume their full collection efforts, after adopting a gentler approach during the height of the pandemic, with a number of officials expressing that they did not want to give the public, the perception that they were targeting families’ stimulus payments. Well, with the stimulus payments processed and distributed (and no new payments on the horizon), you can imagine that the Service is ready to get back to the business of collecting monies owed to the Treasury.

Now, that you have your final notice (Letter 11, CP90, etc), what should you do? First, don’t panic! You have remedies available to you that can keep the wolves at bay, while, you prepare a strategy for resolving your tax debt. Yes, that does mean that you will now need to address the situation, because by the time you receive the final notice, several notifications over the time period of the outstanding obligation have already been sent to your attention, and this final notice is really to get you to either pay or begin a conversation with the Service about how you can resolve your situation. Also, keep in mind that as soon as you use any of the available options to “buy time” or delay, that the IRS will probably issue a Notice of Federal Tax Lien (NFTL).

This notice is just that, a notice. A lien arises statutorily as soon as the IRS assesses a tax upon a taxpayer, automatically. The notice is just to let everyone knows one exists. If the NFTL is bothersome to you, there are ways to get the lien withdrawn as well.

Back to the Final notice you’ve just opened. You’re now on the clock. The second page has a paragraph, notifying you, that you have 30 days to file documents that can guarantee your right to an appeal (Form 12153). While, its true you have up to a year to file this form (as opposed to 30 days), 1) you only have the right to an equivalent appeals hearing (may not be the same as an appeals hearing), and 2) you lose your right to go to US Tax Court. This may make the Revenue Officer or Agent involved treat your case a little differently, because they now know that certain remedies for you the taxpayer are off the table.

Once you’ve protected your rights, you can get down to resolving your tax obligation. Traditionally, most taxpayers have the ability to full pay, however, a number of situations (and fortunes) have been altered by the pandemic. Leaving more individuals without the ability to pay, which is determined by your Reasonable Collection Potential (RCP). Once you’ve determined your RCP, you should have a clearer understanding of what you need to do. Don’t forget to check your Collection Statute Expiration Date (CSED) for more focus on what can be done in your situation. While, you are not allowed to “stall” for time, you are allowed to maneuver for more time, without “tolling” the statute, and adding more time to the CSED.

Should you fail to pay heed to the final notices, in approximately 45 days a levy will be placed. Should this happen you do have approximately 21 days to resolve the situation from the date of the actual levy. This is because, although the money is no longer in your bank account, the money is held in suspense for about 21 days before the money is actually transferred to the U.S. Treasury.

Remember, you’re entitled to one month’s expenses in your bank account, but you would have to request the funds be returned. Tax payer would need to prove that more than one months expenses would be needed and that such would help the IRS collect the amount currently due

If you feel as though you may be one of the taxpayers having trouble with staying or becoming compliant with your tax obligations, We can help!. Feel free to contact us at your leisure.