It is not necessary that an assessment review letter from the IRS implies that you essentially owe back duties. It could be a straight forward book keeping mistake or another reason. The most widely recognized reason behind an IRS review used to be related to off-base name or Social Security number recorded.
The IRS sends notice or letter asking additional tax payments or sometimes for more information about return filled. If they owe additional taxes, the IRS will also mention such information while sending notice or letter.
IRS issues first notice or letter in mail to the person or organization clearly providing the details regarding a disparity. It also notes that IRS requests to audit the records. It is highly advisable to immediately start gathering the requested documents and send back with a summary to the IRS. If you do not have or missed any documents that are requested by the IRS, then contact a tax audit lawyer who can help you with further procedures. But on the flip side, what happens if you ignore the IRS first notice or letter, the IRS will issue second notice within a span of two to four weeks from the issuance of first letter.
The IRS’ second notice will provide details about appointment to attend for auditing all your tax documentation papers. But again, if you ignore this letter from the IRS, then you become seriously delinquent tax debt individual/organization. The IRS may take legal action such as wage garnishments, freezing bank accounts and investments, and possibly jail time.
Here is a summary of possible consequences when you ignore IRS Notice or Letter:
- Substitute for a Return: If the notice is about 2566, then IRS is mentioning that you have not filled a tax return. Therefore IRS will file substitute returns which will be always in favor of IRS and against the taxpayer. IRS use the information available like W-2 or 1099 for Substitute for Return (SFR) for all the unfilled years based on the information on those tax documents. The IRS will take every bit of gross income that they have on your reports, ignore any deductions and tax it at the highest rate. Once again the tax return will be sent to the taxpayer in mail with “90-day letter” to respond.
- Assets are seized: Failure to respond to the “90–day letter”, the IRS will close the file and start the procedure to collect the debt. First thing the IRS can do is to freeze your bank account, collect from your wages etc. The IRS can seize your personal property and real estate, even if it is not in your physical possession. The IRS also have right to take payments from the clients, rent from tenants and persons retirement funds. The IRS can contact whoever is holding receivable fund from the tax payer and can get them to send it directly to the IRS. The IRS will then provide you with the sale notice and announce the pending sale to the public, generally through local journals or government leaflets. Usually, the IRS will wait at least 10 days before selling your property after providing government notice. Cash from the deal pays for the expense of seizing and selling the property and, at last, the duty obligation will be paid. On the off chance that there’s cash left over from the deal in the wake of settling off your regulatory expense obligation, the IRS will reveal to you how to get a discount.
- Passport revoked or Denied: The IRS has authority to deny passport from state department if you have seriously delinquent tax debt. Therefore state department generally will not issue back the passport until you get clearance from the IRS. In case of new passport application The State Department will simply reject your passport request until official approval from IRS. In case if the person is in abroad then state department declares passport is withdrawn from the abroad and restricted validity passport can only be issued by the State Department for immediate return to the United States.
It is important to act smart immediately you receive the IRS Notice or letter. IRS Audit Group’s Tax Professionals, CPA’s, tax attorneys have strong expertise in IRS tax issues. We know the tax payers’ rights and help them to facilitate the audit process by representing them throughout the entire process.
Contact us immediately and get free consultation to understand the scope of your tax issues.
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