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What To Do When You Receive IRS Notice of Overdue Taxes

May 22, 2014

When you have unpaid taxes after the filing deadline, you will receive an IRS Notice of Overdue Taxes regarding their payment. The IRS sends multiple notices with information about the tax debt amount to be paid, why the tax debt was incurred, and how to make payments to resolve the debt.

If you have a tax debt that remains unresolved and you did not respond to earlier IRS notices regarding tax debt, then you can expect to receive LT 16 (Letter 2050). This IRS letter regarding tax debt payment must be replied to in 10 days from the date on the letter. If this letter is ignored, then the IRS can move to aggressive collection actions such as a tax levy.

Even if you do not have the ability to pay your tax debt fully or even partially, you must respond to IRS notices or contact a tax service to seek resolution. If your financial condition only allows you to meet basic living needs, the IRS cannot collect back taxes from you. Ignoring or avoiding payment of taxes can lead to a levy on your wages, bank accounts, tax refunds, etc. Therefore, it is advisable to seek a resolution.

Though the IRS Letter 2050 includes ways to resolve your tax debt, you should explore resolution options yourself to try to achieve the most beneficial resolution for your tax debt. There are IRS programs to allow reduction or removal of penalties, reduction in tax debt, transferring of the tax debt to the liable spouse, etc. Depending upon the particulars of your case, you can check your eligibility for the many IRS plans and seek a resolution that provides you the most benefits.

If you receive Letter 2050 after you have qualified for a payment plan or are under the resolution process, you can contact the IRS on the number at the top of the letter. If you had earlier contacted the IRS about the mistake and it was not corrected, you can contact the Office of the Taxpayer Advocate.

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