Receiving any notice from the IRS is a scary thing to go through, especially if you aren’t sure what the letter means or how to proceed appropriately. Millions of Americans receive an IRS CP14 notice if they owe unpaid taxes or if there are any issues with what was previously reported.
If you’ve received this letter, make sure to take a few deep breaths and don’t panic. There are several different solutions available for you and your situation.
Please continue reading below to learn more about this notice and how to best proceed with it. We will cover all you need to know about the IRS CP14 notice and who you can contact to walk you through communicating with the IRS.
1. Understand What a CP14 IRS Notice Is
The Internal Revenue Service sends out the CP14 notice if you did not pay your taxes or paid too little and need to take care of the rest of the bill. This letter is a notice merely making you aware of the balance you owe and that you need to pay it as soon as possible. At this point, the IRS is not taking any action against you, so there is no need to panic.
2. Review the Information on the Document
When you receive the IRS CP14 notice, be sure to read the document thoroughly. Check if the letter came from the Internal Revenue System or some other agency. If the letter did come with the IRS, the letter should also include instructions on how to respond.
You can request a transcript if you need more information about the tax owed. If you received the letter from a state tax department, you might need to call them for an explanation of the letter and what they’re requesting.
3. Determine if the IRS Is Correct
This federal IRS Notice should outline how much you owe in the notice. They also provide you with thirty days to pay back the debt if you agree with the debt.
If the amount they request seems questionable or you disagree with what the IRS is asking you for, you can ask for a transcript. If things still don’t line up, you have the right to reach back out to the Internal Revenue Service to figure out what this debt is.
4. Review Your Options
You can pay the debt if you agree with what the letter states. The IRS gives you thirty days to pay off the debt you owe, but if you need more time, you can do so. If you are able to pay off the debt completely, you can make a payment on their online portal.
This option reduces the amount of interest you have to pay. If you were to make a payment plan, you would have to pay interest.
If you need a tax relief option, you can reach out to the IRS for more options. If you qualify, they may reduce how much you owe or work out an affordable payment plan.
5. Don’t Ignore the Notice
The last thing you want to do is ignore a notice from the IRS. If this is your first time dealing with this government agency, it is easy to become overwhelmed and intimidated.
The IRS is usually more than willing to work with taxpayers, regardless of your financial situation. If you ignore the notice, there is a chance that the IRS could start imposing fees and penalties on your account. If you allow these to pile up, you’ll end up paying more than you initially owed.
6. Options if You Disagree
If the notice does not make sense or align with your tax documents, you can contact the IRS. There is a number listed on the notice at the top right that you can call. When speaking with a representative, make sure that you have your tax documents on hand to refer to so the conversation goes smoothly.
If you are unable to find a resolution over the phone, you can send in an appeal and prepare a protest. Several different tax professionals, such as tax attorneys, can help you work through this process if you aren’t too familiar with the next steps.
7. Option To Reduce or Erase Penalties
As mentioned earlier, you have the option to apply for tax relief. Depending on your income level, the IRS may approve you to pay down the debt with an affordable monthly installment, or they can reduce your penalties.
You also have the opportunity to send in something called an “Offers in Compromise” letter. If the IRS approves your Offers in Compromise, you can pay less than you owe.
When creating this letter, make sure you have evidence to back your position. The IRS does not typically accept all Offers in Compromise letters, so to ensure that you have the best result, you may want to reach out to a tax professional for more help.
8. Ask for an Extension
The IRS initially gives you 30 days to pay the debt you owe in unpaid taxes. If you cannot pay the debt within that timeframe, you can ask for an extension. This gives you up to 120 days to pay off what you owe.
If you need more time than that, you can go online and set up an online installment payment plan. Make your payments on time, so you don’t get in trouble or face severe penalties and additional fines.
9. Reach Out to a Tax Professional
As mentioned earlier, dealing with the IRS can be intimidating, especially if this is your first time dealing with them. Instead of dealing with facing the IRS on your own, it would be best to reach out to a tax attorney for more help. They have experience with tax law and know exactly how to handle situations like yours.
IRS CP14 Notice FAQs
When receiving a notice from the federal government, you most likely have many questions you need to be answered. For example, what happens if you continue to ignore the notice? Is it possible that the IRS is incorrect? Below are some common questions taxpayers ask when they receive a IRS CP14 notice in the mail.
Could the Notice Be a Mistake?
It isn’t uncommon for us to accidentally input the wrong numbers in our tax returns or for us to forget to include specific information. When we do this, the calculations for our tax liability can get messed up. You may only have a small liability to pay if it is a minor thing.
If you feel you paid all of your owed taxes by the proposed deadline, make sure you look over your payment records and tax return before sending in any payments. As mentioned throughout the article, make sure you call the IRS to clear up any confusion before sending any payments.
Deductions and Credits
Another thing to do before sending off any payments is to get in contact with a tax professional about possible tax credits. There is a chance you could amend your return to receive missed credits or deductions that you may have missed.
If there are any credits available, you could significantly reduce how much you owe in tax liability. There is also a chance that it could end up providing you with an additional refund.
What Happens if I Don’t Respond?
As mentioned earlier, if you fail to respond to the IRS within those 30 days, they will continue to send you letters. Those letters will remind you of your debt and warn you of the actions the IRS can take if you continue to leave an unpaid balance.
The IRS can and will start putting liens, levies, and other penalties in place to try to recoup money for the debt you owe. This means that there is a possibility the IRS will try to seize your assets, bank accounts, and wages. If the Internal Revenue Service decides to levy your wages, your employer must comply with them.
Should I Hire a Tax Attorney?
Throughout this article, we mentioned that it would be best to reach out to a tax attorney if you have any issues with the document. They can at least give you a solution on how to best approach the letter, especially if you don’t agree with the debt. The attorney can help you create an Offers in Compromise letter.
How Much Is a Tax Attorney?
Tax attorneys make their payment schedules and some charge between $200 to $400 an hour, depending on their experience. They may charge you a flat rate if you have a simple fix. On the other hand, if you have a complicated tax problem, the attorney will most likely charge per hour.
How To Find the Right Attorney
The quality of services offered by different tax lawyers can vary, so it is imperative that you do your due diligence in finding an experienced and qualified lawyer. When looking for the right attorney, you want to make sure they can practice law in your state.
There are some rouge lawyers who still practice even after disbarment, and some just claim they’re tax attorneys as a scam. Before you sign any contracts with an attorney, check out their licenses. They should be registered under your state’s bar association.
Experience and Qualifications
The right tax attorney will have a law degree and a specialization in taxation. They also have a CPA license. Most attorneys post their previous results on their websites for you to review.
If you have any questions about their specialization, make sure you request that information from the attorney. They should not be hesitant about providing that information.
To help you gauge the client-attorney interaction and the type of service they offer, take a look at their reviews. Many attorneys have Yelp, Avvo, or Google Business pages where their previous clients can rate their experience.
Be sure to pay attention to the attorney’s response time and how clients liked working with the attorney. What did they not like about the experience? Is there a common review amongst previous clients that seems like a red flag?
Schedule a Consultation
Reading online reviews can give you a general idea of the attorney and their law firm, but the best way to really gauge a potential lawyer is to meet with them. Most reputable attorneys offer free, no-obligation case reviews. During this consultation, pay attention to how you feel and how the office staff treats you.
Feel free to answer any questions you have to the attorney while you’re there. If you feel uncomfortable or the attorney seems to shrug you off, that is a massive indicator of how they will handle your case.
You should feel comfortable when you work with your attorney. They are your advocate, and dealing with the IRS is a big deal. Mishandling a case with the IRS could put your job, property, and finances on the line.
CP14 IRS Notice Assistance
Dealing with the IRS can be intimidating, especially if it is your first time receiving a CP14 IRS notice or any other document from them. The government is usually willing to work with taxpayers, so long as you are eager to communicate with them and work something out.
The last thing you should do is ignore this notice because it can result in the IRS taking action against your assets and wages. Contact us if you’ve received the CP14 IRS notice and need help finding the right solution for your situation. Our team of CPAs and tax attorneys is here to answer any questions or concerns you have.