IRS Tax Debt- What Do IRS Notices Mean, And How Do I Respond

Threatening Letters If you have a problem with the IRS, they automatically send you a notice. A common notice is “Notice of Tax Due and Demand for Payment”. When you pull something like that out of your mailbox, most people panic and then ignore the letter. Bad idea! If you follow the steps below, you can resolve the notice quickly.

- Read, Read, Read: It looks like I'm stating the obvious, but I'm not. Most of the people I called didn't even read the notices the IRS sent them. Sometimes the IRS Notice is simply asking for more information from you, or is letting you know there was a discrepancy on your tax return. All notices have a code containing “CP” and number. Research that code to find detailed information on the purpose of your specific notice.

- Call the IRS: The Notice will have a phone number for you to call. You can use this information to ask for an explanation of the notice and how you can resolve the problem. But I'll be honest with you. When I was an IRS Hit-Man I only wanted to discuss one thing, and that was how fast they could give me their money. You will have to fight to get the information you need, without giving away what you can't afford to the IRS.

- Write Back: If you choose to mail a response to the IRS, it's important to use Certified Mail. The IRS get millions of pieces of mail a month. Not surprisingly some mail slips through the cracks and gets lost. Using certified mail with a return receipt requested will let you know that the IRS received your response.

Keep Copies: Be smart and keep copies of the original letter and your responses with the IRS for your records. Also make sure you keep copies of any postal receipts. This will be important if you end up in dispute with the IRS and they claim you didn't get back with them.

Eye of the Storm: So now you know what that letter means. But remember, making contact with the IRS is just the first step. If you owe the IRS, it won't be easy to find a solution. Do you homework, and do things right the first time.