IRS to Resume Balance Due Notices

Breaking news from the Internal Revenue Service! 

The IRS just announced that they are sending out 8 million CP14 balance due notices starting this month.

What is an IRS CP 14 notice?

It’s the first notice the IRS sends you telling you that you owe them money. 

So, the IRS just announced that they're going to kick-start their collection activities again. If you remember, when the whole COVID-19 situation was declared an emergency back on March 25, 2020, the IRS decided to hit the pause button on some collections activities.

Later, they even extended this relief in February 2022, which included putting a hold on certain collection notices like lien and levy notices.

But here's the change, starting this month, May 2023, they're going to start sending out those notices once again. And get this, we're hearing chatter that the IRS might be getting ready to send out a whopping five to eight million of these CP-14 notices by the end of May. So, keep an eye on your mail, folks!

If you owe money to the IRS, this will be the first letter they send out. Now, don’t freak out if you receive one. The CP-14 balance due notice, is a gently worded letter. The ones they send after this one get progressively stronger and more threatening.

If you get one, read the letter, and try and figure out what it’s about. Maybe you’re already aware that you owe them money, like maybe it’s the balance due on your 2022 tax return, but forgot to send them a check. In that case just make the payment and everything will be good.

If you agree with the balance due on the notice, but can’t pay it in full, you can setup a payment plan with the IRS at irs.gov/payments and pay the balance over 72 months, as long as the balance is under 50 thousand.

But, maybe it’s a correction they made on your tax return, like they did for my client Mick.

The IRS said that he owed them 5 thousand dollars because of the way he self prepared his return. He sold his home that he and his wife lived in, and incorrectly calculated a taxable capital gain of over $30,000.

Since he qualified for the Section 121 exclusion, he was able to exclude the taxable income from the gain on the sale of his home.

What should you do if you disagree with the notice?

You should call the phone number located in the IRS Help section of your notice. Have your paperwork ready when you call, such as canceled checks, amended return, etc. I just want you to be prepared folks.

Read the letter and try and figure out what’s going on. Don’t ignore it. If you don’t understand it, reach out to a qualified tax professional like myself. These won’t go away by themselves and they’ll just keep sending letters, so don’t ignore them.

Thanks for reading, and see you in the next blog post!