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Do You Owe Money to the IRS?

what do i owe the irs

I've just received a "Notice of tax due" letter from the IRS. What is this?

The IRS sent you this letter because it believes you have not paid the total amount of taxes that you owe.

What can I do about it?

First, do you agree with the amount of tax that you owe?

If you disagree . call or write to the IRS office listed on your notice. Or visit your local IRS office. You will need to gather records, such as canceled checks and receipts, that will help you to explain your position to the IRS. Do not send original documents to the IRS. You can send copies.

You have the right to have your case reviewed by an IRS manager or to request a collection due process hearing.

Act quickly. Do not put off fixing your tax problem. The IRS will be adding on interest and/or penalties if you delay.

Notices from the IRS will usually include deadlines. Pay attention to them. You can lose legal rights—and more money—if you are late.

If you agree that you owe this amount. pay it if you can. If you can’t afford to pay it all now, don’t put it off. You have options. The IRS may agree to one of these.

1. Installment agreement. You agree to pay the full amount owed over a longer period of time in monthly payments. Here are some of the basic rules:

  • You must be up-to-date with all of your tax returns (even if you didn’t have to file in the past).
  • You will be charged a "user fee."
  • The IRS can’t levy any of your property while this agreement is in effect, or for 30 days after the IRS decides not to accept your agreement, or during the time that you are appealing an IRS rejection. The IRS may still put a lien on your property to secure their interest.
  • The IRS will request financial information from you. You will need to gather three month’s worth of bank records and receipts.
  • If you fail to make your payments, the IRS may put a levy on your property or file a lien on your property.
  • 2. Offer in Compromise. You ask the IRS to forgive part of your debt if you pay as much as you can afford.

    • You must be up-to-date with all of your tax returns (even if you didn’t have to file in the past).
  • You will be charged a "user fee."
  • You can request an offer in compromise for the following reasons:
    1. There is a valid question about the amount of your debt.
  • There is a good chance you’ll never be able to pay off the full amount that you owe.
  • The amount you owe is correct and you could pay it off but you have an economic hardship or other special circumstances.
  • 3. Currently not collectible.

    You ask the IRS to delay collection of your tax debt because you are suffering an economic hardship.

    • Interests and penalties will continue to be added to your debt.
  • If you receive money from another source (inheritance or the lottery, for example), the IRS may claim it.
  • If you go back to work, the IRS may claim part of your wages.
  • The IRS may put a lien on your property.
  • You will receive regular reminders from the IRS showing how much you owe, but as long as you are in this category, the IRS cannot collect from you.
  • Some things to consider when you are deciding which option is best for you:

    • Are you suffering a hardship?
    • Are you currently working?
    • If you’re not working, do you plan on working again?
    • How long have you had your debt?
    • What assets do you have?
    • What other types of debt do you have?

    The IRS has put a lien on my property. What does this mean?

    When the IRS puts a lien on your property, it does not mean that they have taken it. It means that they have put a claim on it so that they can make sure they get your debt paid back.

    A lien will prevent you from selling or transferring your house freely. If you are selling, the IRS can get money from the buyer before you are paid.

    A lien will also affect your credit rating, making it difficult to buy other property.

    The IRS must give you notice at least 5 days before they file the lien.

    The IRS must take the lien off within 30 days of your payment of the debt. You will also have to pay all interest and penalties.

    The IRS must release the lien 10 years after they claim (or "assess") the debt.

    Can I appeal a lien filed by the IRS?


    You may ask an IRS manager to review your situation.

    Or you can request a Collection Due Process hearing with the Office of Appeals. You must request this hearing by the date on your notice. If you are unsuccessful at the hearing, you will have 30 days to dispute that decision.

    You can also attempt to work with the IRS so that your debt is paid off some other way.

    The IRS has levied my property. What does this mean?

    Unlike a lien, when the IRS levies your property, it means they have taken it. The IRS can levy any property that you own, including wages and social security benefits.

    Levies must be released when:

    • your debt becomes too old to collect
  • the levy creates a significant economic hardship
  • the value of your property is more than the debt and a levy could be put on part of your property
  • releasing the levy will help the IRS collect the debt
  • Source:
    Category: Taxes

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