If you don’t pay your tax bill, you will eventually receive notice CP14. As of May 2023, the IRS has announced that it is going to be sending out millions of these notices. This is part of the agency’s plan to ramp up collection activities after going relatively dormant during the COVID pandemic and its aftermath. The agency also plans to start sending more CP501 notices from its automated collection system.
What does this mean? It means the IRS is starting to pay attention to people with delinquent taxes, and if you have unpaid taxes, it’s time to make arrangements before the situation worsens. Contact us at The Timothy S. Hart Law Group today to discuss your options to resolve your tax issue. We’ll talk with you about your tax debt and financial situation, and then we’ll help you find the best way to deal with the IRS.
What Is a CP14 Notice?
A CP14 is a demand for payment from the IRS. If you have unpaid taxes, this is one of the first notices that the IRS will send you. The notice states how much you owe in back taxes, interest, and penalties. It also tells you what to do if you disagree and outlines options for paying your tax bill.
Why Did I Receive Notice CP14?
Usually, you receive notice CP14 because you filed a tax return and didn’t pay the full bill. In some cases, you may have paid your full tax bill, but then, the IRS adjusted your tax return which lead to an additional tax liability. In this case, you should have received notices about the adjustment before you received the CP14.
You may also receive this notice if you have a tax bill due to an audit. Again, however, this won’t be the first notice you receive. You will receive multiple notices during the audit process. Then, you will receive a determination notice, and if you don’t dispute the tax, you will receive an assessment notice. If you don’t pay the assessment, you may eventually receive a CP14 notice.
What If I Received Notice CP14A?
CP14A is a notice of balance due that the IRS sends to people who have installment agreements in place. If you’re making monthly payments on your tax debt, the IRS may send you this notice once a year to alert you about your balance.
If you receive CP14A, you don’t need to make any additional payments. Just check to make sure the balance due is correct, and if not, reach out to the IRS.
What if you get CP14 and you’re already on a payment plan? Well, this may happen if you set up the payment plan after the IRS sent the notice. It could also happen if the IRS sent this notice in error. To be on the safe side, make sure that your payment plan is still active, and reach out to the IRS or a tax pro if you need additional help.
What to Do If You Receive This Notice
First, make sure that the information on the notice is correct. Are your personal details correct? Do you agree with the tax due shown on the notice? Do you have any concerns about the penalties that have been assessed? Then, take the following steps depending on whether or not you agree with the notice.
If you disagree with the notice
If there are any mistakes on the notice, contact the IRS using the phone number on the notice and make sure that you have documents to support your case. For instance, if you already paid the tax bill, you should have a copy of your payment details. If you disagree with the tax due, you need a copy of your last tax return.
You may be able to resolve small issues on your own, but if the IRS doesn’t immediately fix the discrepancy, you should reach out to a tax professional. They can review the issue. If the IRS is correct, they’ll explain why and help you make arrangements to pay the tax liability. If the IRS is incorrect, your tax pro can help you dispute the liability. The exact options vary depending on the situation.
If you agree with the notice
If you agree with the notice, you need to make arrangements to pay your tax debt. First, however, you should request to get the penalties removed from your account.
You can get IRS penalties waived if you had a good reason (the IRS refers to this as reasonable cause) for paying your bill late, call the IRS to explain the situation, and ask for penalty abatement. The IRS will waive your penalties if you paid late due to serious illnesses, death, natural disasters, or similar types of very serious issues.
Alternatively, the IRS will waive your penalties if you haven’t incurred any other penalties in the last three filing periods. This falls under the umbrella of first-time penalty abatement or “first-time forgiveness”.
Then, you should make arrangements to pay your tax bill. Here are the main options:
- Payment plan — make monthly payments for up to six years until you pay the tax bill in full.
- Offer in compromise — settle for less than you owe by providing that you can’t afford to pay the full balance.
- Partial payment installment agreement — make monthly payments on a tax settlement.
- Currently not collectible — prove that you can’t afford to pay the bill and get the IRS to label the account as currently not collectible.
What Happens If You Ignore a CP14 Notice?
If you ignore the CP14, the IRS will add more penalties to your account, and interest will continue to accrue on your balance. If you owe $10,000 or more, the agency will probably issue a tax lien against you. Note that the IRS doesn’t need to send you any additional notices before issuing a tax lien. That’s why it’s critical to make arrangements as soon as possible.
It is important to know what to do if you receive an IRS letter or notice. Denial, avoidance, and procrastination are all activities in which an individual may engage when faced with something that he or she would rather not deal with or do. However, such coping tactics are almost always sure to backfire and make an unpleasant or difficult situation even worse. This is especially true in cases where an individual receives communication from the Internal Revenue Service.
Anyone who opens their mailbox and sees a letter from the IRS is likely to panic. Whether an individual chooses to throw the sealed envelope away or simply disregard its message, ignoring the IRS can end up costing an individual hundreds to thousands of dollars in fines and, in some cases, a whole lot more.
Annually, the IRS claims to send “millions of notices and letters to taxpayers for a variety of reasons,” some of which may be minor or even positive in nature. Even in cases where an individual knows that he or she failed to file or pay taxes or expects bad news, it’s important to open an IRS letter or notice as soon as possible and to contact the agency with any questions. This is especially true in cases where an individual believes that the IRS erred and an individual plans to dispute the issue in question.
In the event an individual takes no action to address or rectify the matter addressed in an IRS letter with a tax due and in need of tax debt relief, he or she may face fines, liens, garnishment of wages, property seizure and even criminal charges. In cases where an individual is in trouble with IRS or plans to contest an IRS matter, it’s a good idea to contact a tax law attorney. Therefore, knowing what to do if you receive an IRS letter or notice is important since your legal rights are st stack, and the quicker your obtain a tax professional, the better the results will be.
The CP14 notice is the beginning of the collection process. If you’ve had a tax bill for years and this is the first notice you’ve received, it means that the IRS is no longer ignoring your account. Once the agency sends this notice, it will send additional notices about every six weeks.
Generally, after the CP14, you will receive one or two more demands for payment. Then, the notices will get much more serious. You will receive an intent to levy, and if you still continue to ignore the situation, the IRS will start garnishing your wages, freezing the funds in your bank account, or taking other assets.
What Is IRS.gov/CP14?
This is a short url to the IRS’s website about the CP14 notice. This web page explains the basics of this notice. In particular, it tells you what the notice is about and what to do if you receive one. The webpage also has links to very detailed information about the IRS collection processes as well as the forms you need to apply for a payment plan or an offer in compromise.
The IRS advises taxpayers to do the following:
- Contact the IRS if you disagree with the information on the notice.
- Pay the amount due in full if possible.
- Request a payment plan or an offer in compromise if you can’t pay the bill in full.
- Look into currently not collectible status if you can’t pay anything right now.
- Be aware that late payment penalties are accruing on your account.
- Note that interest will accrue on the balance if you don’t pay by the due date.
Get Help With CP14 Notice
Dealing with the IRS can be time-consuming and stressful. That’s especially true if you owe a significant amount, have a lot of penalties, or disagree with the amount due. The good news is that you don’t have to deal with the agency on your own — we can help you.
At The Timothy S. Hart Law Group, we have extensive experience helping people deal with IRS tax issues. We can also help you deal with state revenue agencies. If you’ve been ignoring your tax bill for a while, CP14 is a wake-up call that you can no longer ignore the situation.
The IRS was letting taxpayers stay under the radar, but the agency is coming out of hibernation. Act now if you want to reduce the consequences and keep the penalties as low as possible.