How to Handle an IRS Demand Letter with Tax Relief Professional
An IRS demand letter is one of the most intimidating documents a taxpayer could receive. It means that you are being audited and the IRS is demanding payment on whatever back taxes or penalties you owe. However, with the help of a tax relief professional Learn more, you can navigate this process and take some of the pressure off yourself. In this article, we’ll explore how to handle an IRS demand letter properly and what steps to take when dealing with it.
What is an IRS Demand Letter?
An IRS demand letter is a formal notice from the Internal Revenue Service (IRS) that you owe back taxes. The letter will list the specific amount of money you owe, as well as what steps you need to take to pay your debt and avoid further penalties.
If you receive an IRS demand letter, it’s important to take action immediately. The sooner you contact a tax relief professional, the more likely they’ll be able to help you resolve your debt and avoid any negative consequences.
Reasons You Might Receive an IRS Demand Letter
There are several reasons why you might receive an IRS demand letter. The most common reason is that you have failed to pay your taxes in full and on time. This can happen if you forget to file your tax return or make a mistake when calculating your taxes owed. Another common reason for receiving a demand letter is failing to pay estimated taxes on income that is not subject to withholding, such as self-employment income or investment income. You might also receive a demand letter if you claim excessive deductions or credits on your tax return, or if the IRS suspects fraud or underreporting of income.
How to Respond to an IRS Demand Letter
If you’ve received an IRS demand letter, it’s important to respond as soon as possible. The first thing you should do is contact a tax relief professional. They can help you understand the letter and what options are available to you.
If you owe taxes, the IRS will typically give you 30 days to pay the amount in full. If you can’t pay the full amount, you may be able to negotiate a payment plan or an offer in compromise. You’ll need to provide financial information to the IRS so they can determine what you can afford to pay. If you disagree with the amount that the IRS says you owe, you can request a hearing with the Office of Appeals. You’ll need to submit a written request within 30 days of receiving the demand letter.