Understanding the IRS Balance Notice
By Nehemiah Jefferson, Esq., LL.M.
Even when a taxpayer knows that he or she owes the IRS, receiving a balance due notice in the mail can bring a level of discomfort. Not long after the taxpayer has been assessed, the IRS begins to send out notices of the tax due.
The first correspondence sent by the IRS will provide notification of the balance due. If you fail to pay the amount owed, the second notice you can expect to receive is CP501. This notice reminds that you have a balance due. Failure to satisfy your tax bill at this point will lead to the IRS sending a second reminder notice (CP503) of the balance owed.
If you receive notice CP504, this is an urgent final notice to pay. The IRS is preparing to use an alternative method of collection. Lastly, the IRS will issue LT-11, a notice of intent to levy or Letter-1058.
As you can surmise, significant time and opportunity has to elapse prior to the IRS taking serious action to collect what may be owed. Consider hiring a tax attorney the moment you receive a notice for which you cannot pay.
Nehemiah Jefferson, Esq., LL.M., is Principal of Esquire Tax Firm PLLC. The firm practice areas include Civil and Criminal Tax Representation, Estate Planning, Probate, and Business Planning. He earned his Bachelor’s degree from The Florida State University, his Juris Doctor from John Marshall Law School (Atlanta), and LL.M. in Taxation from the University of Alabama. Attorney Jefferson is licensed to practice law in the State of Florida, Texas, The District of Columbia, and is a member of the United States Tax Court Bar. He may be reached at www.esqtaxfirm.com.
