A Notice of Deficiency is a formal written claim by an agency that you owe income taxes with interest and penalty dues. The Notice of Deficiency also explains that an assessment is being calculated in regard to your income taxes owed. A Notice of Deficiency is also referred to as a “ninety day letter”; because once you receive the letter you have 90 days to take action.
Most people react in fear when receive such a notice in the mail. They feel overwhelmed and are not sure how to act appropriately. Keep in mind that not responding to a Notice of Deficiency is the worst possible course of action. If a tax agency does not receive a timely response after issuing an official Tax Notice, they will indeed take action to collect the outstanding debt. During this time, interest and penalties will continue to accrue on the unpaid balance. Moreover, failure to resolve an outstanding tax debt can result in a variety of collection efforts including tax levies, tax liens and wage garnishments.
If you receive a Notice of Deficiency your first step should be to consult with a tax professional on the matter immediately. A tax professional can work with you to resolve such tax debt issues by correcting incomplete or incorrect tax filings or by evaluating and negotiating various settlement or payment options. Settlement options may include Offers in Compromise, Installment Agreements, or Penalty and Interest Waivers.
In some cases, the IRS may declare a taxpayer “currently not collectible” after they have received documentation that the person has no ability to pay the tax debt. If this determination has been made, all collection activities including garnishments and levies must be stopped. In cases similar to this, the help of a qualified Certified Public Accountant is well worth the investment. If you have received a Notice of Deficiency it is important to seek help from a tax expert immediately. To receive a free Notice Consultation with a licensed tax expert simply call us at 877.889.6572.
For more information about our tax debt resolution services visit us at www.professionaltaxresolution.com. Contact us by phone at 877.889.6527 to receive a free, no obligation consultation.
