What Happens If You Ignore the IRS

There are many folks who find themselves in a situation where they owe tax they didn’t budget for, or anticipate they will owe tax that they cannot pay.  Often, these folks avoid filing tax returns, or they file tax returns and ignore (or otherwise try to avoid opening) the myriads of letters the IRS sends because folks assume all are just threatening reminders of a balance due they cannot pay.

While letters from the IRS are reminders of a balance due, they are also reminders to Taxpayers of their rights.  So, in essence, when a Taxpayer doesn’t open the envelope and doesn’t take action, the Taxpayer is waiving their right to any favorable outcome they can get by working with the IRS at the time the notice is issued.

Notices from the IRS typically are issued in the following stages of an attempt to collect:

1)    The initial notice, inquiry, or billing.  These are the nicest letters the IRS will send and will contain instructions on how to file a dispute if you wish to do so.  They will also send a second reminder notice that is almost as “friendly.”

2)    The certified letter.  While a Taxpayer rightly assumes this is a notification from the IRS that indicates they are feeling ignored and want to verify the Taxpayer receives the message, it also can be a notification to the Taxpayer of their right to file a petition to have their concerns heard by the U.S. Tax Court and take their case out of the hands of the IRS.  The main reason why this letter comes certified is because the IRS is required to inform the Taxpayer of their rights at each step of the process.  While it feels like bad news, it can actually be the best news a Taxpayer can receive depending on the situation.

3)    After the deadline on the certified letter goes by, the IRS will then send notifications of potential lien and levy action, and then, of course, follow through with them.  This is the time Taxpayers usually decide to get help.  While not all hope is lost at this stage, it does make the situation harder to resolve compared to the first two stages.

If you or someone you know has an issue with paying their federal taxes and needs help to end their IRS nightmare, please reach out to me at (916) 439-9373 by call or text.

Check out my related video https://youtu.be/ROUh66dGt68