You’ve just received a certified letter from the IRS. What could it be? Chances are one of seven things. In this article, we’ll go over each of those seven reasons, and what you can do to address them.
Keep in mind that if you receive a certified letter from the IRS, it’s important to take action immediately. Don’t ignore it – that’s when the problems start!
Does the IRS send certified mail?
In general, the IRS sent you certified mail to indicate that it attempted to give you notice of any problem the IRS has with you.
The IRS sent you certified mail because the IRS wishes to protect itself in the event that, among other things, you claim that the IRS failed to provide you notice and an opportunity to be heard.
Furthermore, if you owe money to the IRS, the IRS may assign a Revenue Officer (a person who looks to collect from you and guarantee that you follow tax rules) to your case.
The Revenue Officer may send you essential letters through certified mail, such as the Final Notice, Notice of Intent to Levy, and Notice of Your Right to a Hearing letter manually.
Why would the IRS send a certified letter?
The IRS might contact someone for a variety of reasons, but the most prevalent ones are unpaid balances and inquiries for further information.
There are a few reasons why you might receive IRS certified mail.
1. Outstanding Balance
When the IRS sends certified mail, it’s usually because your unpaid tax balance has reached a certain threshold. When the collection process begins, the IRS uses standard mail to deliver notifications, but if they are ignored, it will escalate.
A demand letter will provide instructions on how to pay the taxes owing, as well as other alternatives such as a compromise offer or an installment plan.
After receiving an IRS-certified mail with a payment demand, it is critical to contact the IRS right away.
A tax lien is a governmental claim on your property that you are required to pay taxes. It’s an indication of any outstanding federal debt and interest, as well as penalties and interest that have accrued from previous years. The accumulation of this balance adds to the amount owed, resulting in future penalties and interest charges.
2. Refund Discrepancy
Tax refunds are no longer a surprise. Individuals and businesses that anticipate receiving a tax refund can anticipate IRS-certified mail if the return is incorrect.
You may be entitled to a larger or smaller refund than you anticipated, but it’s crucial to compare any new refunds to the original tax return.
Even if a certified letter informs someone of an error in the refund, it’s vital to go through the entire message for any additional details. There may be additional actions to take to guarantee that the payment is processed.
3. Return Questions
The IRS may contact you about a tax return from time to time. If the queries aren’t urgent or essential for processing a return, the IRS will send them by regular mail.
However, if your case is more complicated, the IRS will send you a certified letter first. The IRS will usually include any forms that need to be completed.
Tax preparation and filing are inextricably linked, with each the other’s companion. Many common questions about tax returns include answers to: sources of income, address issues, and verification of tax credits and deductions. These problems will add to the delay of your refund.
4. Identity Verification
The IRS takes identity protection seriously, and they will send certified letters if they need to check someone’s information.
This letter will include instructions on how to complete the identification verification procedure, as well as comprehensive requirements for identification, such as credit card account numbers or student loan statements.
There are several other conditions that must be verified. Such as a mobile phone number, income tax returns, filing status, and either a 5071C, 5747C, or 5447C letter.
This process is usually time-sensitive, so it’s important to complete it quickly. If you don’t, it could delay your refund.
5. Information Needed
The IRS may occasionally require further information to process a tax return. There could be a missing Form W-2 item or an incorrect employer information match in the records that the IRS has on file.
The IRS will deliver any necessary direction for returning the requested information in a simple manner if it is essential. This might be over the phone or via an online portal.
In certain situations, taxpayers may receive an IRS audit letter. This authenticated letter will include instructions for returning any supporting materials as well as other information that needs to be updated. It will also have a deadline, so keep track of the dates.
6. Return Amendments
The IRS does not conduct a full audit on every tax return that it receives, but in certain situations, such as when fraud is detected or significant changes are made to the filing of a tax return, the IRS must make updates. In these instances, the IRS will send a CP2000 letter.
A letter will be sent to you, informing you of the modifications and instructing you on whether or not to accept them. Anyone who disagrees with the changes may need additional evidence.
The IRS allows you to make these changes without submitting an amended return. They are generally time-sensitive, but they do not require an amended return. The modifications are critical to the return’s processing, therefore any delay in responding to the notification might result in a tax refund being delayed further.
7. Processing Delays
Another reason the IRS sends certified mail is to notify you of processing delays. While they don’t send notifications for widespread delays that affect everyone, they do send certified letters to those who are expecting a tax refund but may be subject to additional federal taxes.
This notice is called the CP44 notice. It unfortunately doesn’t come with instructions.
The IRS provides a courtesy notification in such cases so that you are aware of any potential processing delays. When the IRS has determined how much of your payment will be applied to an outstanding tax debt or sent to the recipient, more information will become available.
How to deal with an IRS Certified Mail
It’s frightening to get IRS-certified mail. It’s not unusual for individuals to set the letter aside without reading it in order to handle the situation later. This might create worry over what is inside the letter.
If you’re receiving IRS notices, here are some tips for coping with them instead of letting anxiety build-up:
- Take the time to read the whole letter: The IRS will send you a letter if your return was processed incorrectly or without documentation. The type and cause of the notice, as well as detailed instructions for taking the next steps, are all included.
- Make a list of critical deadlines: If the IRS needs forms signed or supporting documents, you’ll receive a certified letter with a deadline and directions for returning the information.
- To avoid being in collections, contact should be established: Individuals with outstanding tax accounts should contact the IRS immediately to avoid collection efforts such as additional letters and phone calls.
- Get help from a certified tax professional: Some individuals have taxes that are practically unmanageable without the assistance of experienced tax professionals.
The most crucial advice for dealing with IRS-certified mail is to avoid ignoring it. Ignoring certified notifications may result in federal and state liens, as well as the possibility of wage garnishments.
Have Outstanding taxes? We Can Help
Individuals and families who get IRS-certified correspondence for their tax obligations should contact a qualified tax lawyer with IRS expertise.
Tax relief solutions can assist people who are having difficulties managing their money. A Tax Resolution Specialist has the knowledge and experience to negotiate the best settlement proposals for each case.
Call right now to speak with a tax expert. Our network of tax professionals is made up of specialists from all across the country, some of whom have decades of expertise.