If you’re expecting to see a listing and detailed description of every kind of certified mail that the IRS might ever send, well, consider yourself saved. The primary and most important consideration is that if a professional has not been consulted prior to receipt of a certified letter on any particular matter or issue, the time to do so is promptly, because that letter may contain important deadlines that need to be complied with, or because there are planning steps that need to be timely taken, or because the fact that you’re getting a certified letter strongly suggests that you may benefit from some help in understanding or fully appreciating what resolution alternatives are available or how most effectively to use them. With an initial consultation being free, the decision to get one is simply a no-brainer. And the example we’ll get to in a moment will drive that point home.

Why “Certified”?

Certainly, certification highlights the importance of any mailing, but at a base level, the reason for sending something “certified” is to satisfy requirements of notice and have proof of mailing and a tracking number. Importantly, the fact that it’s certified is proof the IRS sent it to you, whether or not you refuse it or choose not to read it.

Identifying IRS Certified Notices

Certified letter forms are identified by number in the top right corner of the first page, and other than the letter itself, a great deal of information is freely available on the web by googling that number. The fact is that there almost always will be a series of non-certified communications preceding a certified one. And how, when, and if you respond will depend on the nature and background of the matter in question. It could involve something like a balance outstanding, a refund issue, a question about your returns, verification of your identity, information missing from IRS files, changes in your tax return, delays in processing, or something else. It could involve something you thought you were familiar with and could handle yourself. A certified letter gives you a reminder that you may want to reconsider that conclusion.

Typical Certified Notices

Consider the following most common situational example. As background, the cycle for IRS collection notices begins upon “assessment” of a liability for taxes, penalties, and/or interest, which is accomplished by the IRS’ filing of a Form 23C, sometimes referred to as the “23C date”, that sequentially triggers the issuance, 5 to 6 weeks apart, of the following notices:

• CP 14 – Balance Due Notice, which is an initial notice advising of a balance due. It suggests or requests that you pay, request an installment payment plan, or consider filing an offer in compromise.
• CP 501 – Reminder Notice, which is a first reminder of a balance due. It warns of enforced collection action if no payment arrangements are made or response received. If the liability exceeds $10,000, the IRS can, but rarely does, record a federal tax lien. If the case later proceeds to enforced collection, and particularly when the liability exceeds $50,000, the IRS may, and often does, record a federal tax lien. But the IRS cannot levy (seize) assets until a LT11/L1058/or CP90 letter, referenced below, has been sent.
• CP 503 – Second Reminder Notice, which is a second reminder of a balance due, essentially a repeat of the CP 501 info & warnings.
• CP 504 – Third Reminder Notice, which is a third reminder of a balance due and in a more threatening tone, stating that it is a FINAL notice before collection action will be taken.
• LT11/LT1058/CP90 – Final Notice of Intent to Levy. These are the “true” final notices, sent certified mail (the previous notices are not), that authorize the IRS to take enforced collection action and must be provided to the taxpayer before a levy can be issued. They also advise the taxpayer of available due process appeal rights that must be afforded in advance of any such levy. Although the law does not prevent the IRS from filing a federal tax lien, offsetting any overpayments, and restricting passports before any of these notices are provided to the taxpayer, it does prevent the IRS from issuing a levy until more than 30 days have passed from the date on the notice.

Importantly, since each previous notice is sent at 5-to-6-week intervals, plus 30 days following any of these “true” final notices, that allows about 40 weeks to get through the notice cycle before a request for a due process appeal of collection action. In practice, it often takes many more months before the IRS actually issues a levy, and even longer before the case is assigned to a Revenue Officer. Knowledge of these normal and extended practical timeframes can play an important planning role in addressing your matters before the IRS. It’s these kinds of “little” things that can make a very big difference, and they’re just one of many big reasons to put your confidence in Tax Workout Group — we keep our eyes wide open so that yours can take a break.

So, you’ve gotten a certified final notice, and you now have several choices:

• File a protest of the liability asserted;
• Negotiate an installment payment agreement or submit an offer in compromise;
• Pay the amount in question; or
• Eliminate the tax claims in bankruptcy and pay the least amount possible. Yes, discharging tax liabilities in bankruptcy may indeed be a viable option, one that is most often missed because it requires a more sophisticated analysis and practice experience that others simply do not have — see https://taxworkoutgroup.com/blog/precision-tax-we-saved-their-client-thousands as a clear example.

Weighing these choices, evaluating which best fits your circumstances, and then doing what’s necessary to maximize their benefit are what it’s all about. And whether a tax bankruptcy or any of the other alternatives is the path chosen, Tax Workout Group is equipped to handle all aspects, particularly including the important planning steps to maximize their timing and efficacy. Receipt of a certified letter from the IRS is your reminder that the time for action is no later than now.

Bottom Line

You may or may not have fully considered the resolution alternatives, but rest assured that we have. And we’ll provide that roadmap free. The point is to meet with one of our tax attorneys at Tax Workout Group to discuss what makes the most sense in your case. It could cost you plenty if you don’t.