Ways To Get Out Of Debt

The automated collection process starts with receiving an IRS assessment letter. This happens when the IRS comes to the conclusion that you owe back taxes. Generally speaking, once the IRS realizes that you owe back taxes they will begin to send you IRS notification letters. This is meant to make you aware of the situation while also forcing your hand so that you pay the liability. The first letter is an initial assessment. You will then receive four more letters if you do not take action on solving the problem. After the fifth letter, the IRS will begin to take their own action to ensure that they receive payment.

The first letter will open your eyes to the situation at hand. It details the fact that you owe back taxes for a certain period of time. In addition to this, any penalties and interest will also be outlined. The longer you wait to pay your back taxes the more penalties and interest you will accrue. As each letter arrives you will realize that you owe more because of penalties and interest which are accrued daily.

CP Letters

Once you receive the first IRS assessment letter you should open your eyes to the seriousness of this situation. The next four letters that may arrive include:

1. CP-501. This is nothing more than a reminder letter that shows your balance, amount owed, penalties, and interest.

2. CP-502. This is the second letter. This letter is more “threatening” and will once again tell you how much you owe, etc.

3. CP-503. With this letter you will realize that the IRS is beginning to get annoyed. You will be told to pay your liability within the next 10 days. In this letter you will also realize that the IRS is threatening to take action if you do not comply.

4. CP-504. The final letter is also the most threatening. This letter tells you that the IRS plans on seizing your assets if you do not respond. This is your last chance to let the IRS know where you stand, and why you have not been in touch. After this, they will take action.

More information on IRS Letters. Visit the site for more information on letters or to request help with a tax problem.

Article Source:http://www.articlesbase.com/taxes-articles/what-is-an-irs-assessment-letter-917837.html

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