Taxation & Estate Planning

So You Got a "Notice of Tax Due and Demand for Payment", What Next?

By Darrin Mish

When you submit your tax return with taxes owed and do not pay the bill, you will receive a Notice of Tax Due and Demand for Payment from the IRS.  Your lack of payment has created an IRS Problem for you and your family.  Steps to eliminate this IRS Problem are simple.

The amount due on this bill will be larger than what you originally would have paid because of the assessed penalties and interest that has accrued.  Typically, you will be asked to make full payment within 30 days of the date of the notice.  If you cannot pay the entire bill at this time, sending a partial payment will help to reduce the penalties and interest you are being charged.  Another option if you do not have the funds on hand to pay this bill in full, is to consider the use of a credit card or obtaining a loan.  One of these options may be a good choice as the interest rate will probably be lower than the penalties and interest charged by the IRS.

It is important to note that if the IRS believes that the collection of this payment is endangered, you may receive a Notice and Demand for Immediate Payment.  If you do not pay this bill, the IRS may continue with enforced collection action.

If you receive a Notice of Tax Due and Demand for Payment and feel that it is in error, you should contact the IRS by calling the number on the notice, corresponding with the office that sent the notice, visiting your local IRS office, or calling 1-800-829-1040 ( for individuals).  Make sure you have copies of your tax return, documentation, and the notice readily available to help you prove the notice is in error.  If you are writing to the IRS, include these copies with your letter along with an explanation of why you feel you have been billed in error.  Always make copies of everything you mail to the IRS, never send originals.  If the IRS determines that an error has been made on the notice, it will make the adjustment and send a corrected notice.

IRS Problems are always stressful.  To help answer any questions you may have regarding your Notice of Tax Due and Demand for Payment, contact us today.  Our knowledgeable staff can assist you with this or other IRS Problems you are having. We represent clients nationwide, why not give us a call tollfree at (888) 438-6474?

Full post as published by IRS Problem Solver Blog on January 22, 2008 (boomark / email).