Tax CPA accountant explains common IRS Letters | IRS tax problems

Tax CPAs get frantic calls from potential new clients who’ve received an IRS letter. New, re-designed, IRS Letters make them easier to understand, supposedly. But the underlying tax issues might not be intuitively obvious. Hi, I’m Gary Bode, a CPA tax accountant with a virtual office to help with your IRS and tax problem wherever you live. Most IRS letters are routine, but if yours sounds threatening consider calling us for a free phone consult. Here’s some insight with common IRS letters:

• IRS Letter 0484C, Collection Information Statement Requested (Form 433F/433D); Inability to Pay/Transfer. Here the IRS wants financial information to help process something you’ve requested. Like placing your tax bill into Currently Not Collectible status. Sounds innocent but be careful not to open up other areas of IRS scrutiny.
• IRS Letter 0549C, Balance Due on Account is Paid. Just a receipt of sorts.
• IRS Letter 668D(LP 68), We released the taxpayer’s levy. Remember the actual federal tax lien stays in place for seven years, despite it being paid, unless you request the IRS to withdraw it.
• IRS Letter 0681C, Proposal to Pay Accepted. No worries unless you painted yourself into a corner with the proposal.
• IRS Letter 0757C, Installment Privilege Terminated. Better start thinking about how the IRS will try to collect the balance due.
• IRS Letter 1058 (LT 11), Final Notice prior to levy; your right to a hearing. Call a tax CPA accountant today while there are still cards to play.
• IRS Letter 1615 (LT 18), Mail us your overdue tax returns. It’s better to have a CPA accountant prepare these. Why? It’s logical to assume the IRS looks at late tax returns carefully.
• IRS Letter 1731 (LP 64), Please help us locate a taxpayer.
• IRS Letter 1737 (LT 27), Please complete and sign Form 433F, Collection Information Statement. Remember anything you submit can be held against you.
• IRS Letter 1961C, Installment Agreement for Direct Debit 433-G. Like any creditor, the IRS wants you to simplify their collection efforts. Generally, it’s OK to let them debit your checking account. After all they can get that information from other sources. Sometimes direct debit allows your CPA to get the IRS federal tax lien withdrawn even though you’re still paying back taxes.
• IRS Letter 1962C, Installment Agreement Reply to Taxpayer. Sounds like the IRS is proposing new conditions.
• IRS Letter 2050 (LT 16), Please call us about your overdue taxes or tax return. Be careful. Keep the conversation focused. I find it’s better to use written letters where I can craft an unemotional, non-incriminating, response
• IRS Letter 2257C, Balance Due Total to Taxpayer.
• IRS Letter 2271C, Installment Agreement for Direct Debit Revisions. The IRS wants to modify an existing Installment Agreement.

Different divisions of the IRS produce similar letters with a different ID number and name.

• IRS Letter 2272C, Installment Agreement Cannot be Considered. Be ready for Plan B. I think most tax CPA accountants have two or more contingency strategies going on.
• IRS Letter 2273C ,Installment Agreement Accepted: Terms Explained. Read this letter twice. Be sure to understand your obligations. The IRS is a powerful creditor.
• IRS Letter 2318C, Installment Agreement: Payroll Deduction (F2159) Incomplete. Having your wages garnished makes extra work for your employer. Try not to go the payroll deduction route for Installment Agreements.
• IRS Letter 2357C, Abatement of Penalties and Interest. As a tax CPA I frequently request penalty abatements. I’ve got a good track record. Letter 2357C probably means you had a unfiled back tax return that generated a refund when you did file.
• IRS Letter 2603C, Installment Agreement Accepted - Notice of Federal Tax Lien Will be Filed. Tax CPAs try to avoid federal tax levies. Here you’ve irritated the IRS somehow. Try to get rid of the levy after six or so months of full compliance with the Installment Agreement.
• IRS Letter 2604C, Pre-assessed Installment Agreement. I’ve never seen this letter. The IRS publishes guidelines for Form 9465.
• IRS Letter 2761C, Request for Combat Zone Service Dates. Your military liaison probably handles this.
• IRS Letter 2789C, Taxpayer Response to Reminder of Balance Due.
• IRS Letter 2800C, Incorrect Form W-4, Employee’s Withholding Allowance Certificate. I’ve seen lots of snafus payroll. The IRS seldom examines your company’s Form W-4(s) for employees. You need good CPA representation here.
• IRS Letter 2801C Exempt Status May not be Allowed. It takes a lot of work to structure an IRS compliant non-profit entity. Letter 2840 doesn’t prevent you from being a non-profit, but now you have re-structure a few tax exempt components.
• IRS Letter 2840C, CC IAPND Installment Agreement Confirmation.
• IRS Letter 3030C Balance Due Explained:Tax/Interest Not Paid.
• IRS Letter 3127C, Revision to Installment Agreement. Installment Agreements with the IRS have some accommodation for negotiating.
• IRS Letter 3217C, Installment Agreement Accepted: Terms Explained.
• IRS Letter 3228 (LT 39), Reminder notice. The IRS acts like a creditor.
• IRS Letter 4883C, We received your federal income tax return; however, we need more information from you to process it. This sounds innocent, but the IRS is asking you to provide proof on certain figures on your tax return. Don’t incriminate yourself.
• IRS Letter 4903 (LT 26), We have no record of receiving your tax returns. This means the IRS will prepare these tax returns for you eventually. Of course they’ll calculate it to produce the highest amount of tax. It’s always better to file accurate back tax returns where you can include legitimate deductions and tax credits.
• IRS Letter 5071C, We received your federal income tax return; however, we need more information from you to process it. Different divisions of the IRS use similar letters but use a different letter number and/or name.
• IRS Letter LP 47, Address Information Request.
• Letter LP 59, Please contact us about the taxpayer levy. If you got this letter you probably don’t have a CPA but you need one now.

Again most IRS Letters are straight forward on maters you can handle yourself. Sometimes there’s not even a true tax problem. Just be sure of the underlying tax issues and don’t incriminate yourself. If the IRS Letter sounds ominous, consider calling (910) 399-2705 for a free phone consult.

Find me on Google+

Like me on Facebook

Follow me on Twitter