IRS Notice CP14 CPA comments on IRS Notices and IRS Collection Procedures

I’m a CP14 CPA with a virtual office. If you don’t already have a local CPA, consider calling us for a free phone consult at (910) 399-2705.

IRS Notice CP14 is an automated letter that demands tax, interest and penalties. It starts the clock running for the IRS collection process. Note that the IRS assumes it is correct; you’re guilty unless you can prove otherwise. Later IRS Notices will follow if you take no action on CP14:

• CP 501 reminds you of your tax obligation.
• CP 503 is harsher in its demand.
• CP 504 states the IRS intends to Levy, meaning they will seize assets or garnish your paycheck.
• Letter 1048 is usually the last intent to levy notice.
• Form 668(Y)

For more background on these Notices, IRS Levies and/or Liens, please click on the drop boxes in the right sidebar. We have dozens of postings that will help you understand your situation.

How a CP14 CPA may approach your case?

Well each case is different. I’ll blog generally here. Ask your CPA before taking any of these actions, as your particular fact pattern must be considered.

• I assume the IRS is wrong or doesn’t have complete information.
• CPAs get a limited Power of Attorney so we interact with the IRS.
• CPAs interact with the IRS so you don’t have to.
• I often ask for additional time from the IRS when CP14 clients engage me with tight deadlines.
• Every CP14 CPA will listen to your side of the story.
• CPAs will ask for relevant documentation from you and then help you find it.
• CPAs try to prevent the IRS from placing a Lien or Levy on you.
• We look at the information the IRS has on you.
• CPAs determine what you really owe. Often this means preparing correct back tax returns, or, amending earlier tax returns.
• I automatically look at an Offer in Compromise. Why? Maybe they’ll accept less than what you owe. The IRS recently relaxed qualification on the Offer in Compromise.
• We look at your State’s position on your case.
• If you do owe the IRS, your CPA will help you figure out how to pay it.
• CP14 is part of the IRS’ automated collections program. Sometimes getting a Revenue Agent involved is best.

I know it’s hard to believe, but preparing correct back returns almost always results in less tax then the IRS demands. Sometimes it even generates a tax refund.”
- Gary Bode, CP14 CPA

Common Strategies for CP14 Resolution

• Do nothing. Eventually the IRS will seize assets.
• Pay the amount due on CP 14.
• Accept the amount on CP14 and setup a payment plan with the IRS. Be sure to understand your future cash flow.
• Accept the amount on CP14 and ask the IRS if they’ll take less through their Offer in Compromise program.
• Challenge the IRS demand yourself. Research your situation, gather documentation to support your case and then call or visit the IRS.
• Engage a CP14 CPA to help you find the best solution.