Taxpayers may see letters in their mailboxes from the IRS this summer, and they shouldn’t ignore them.
Millions of letters are going out this month to notify taxpayers that the IRS believes they underpaid on their taxes.
This letter is called CP14.
The IRS stopped sending many letters in an attempt to catch up to the backlog, but this one was not paused.
You’ll be sent a letter if the IRS decides you have a balance worth over $5 on your account.
This can happen if you have income you failed to report, or if you did not pay your balance in full.
You’re typically notified that you have 21 days to pay the amount in full.
If you fail to take care of this or ignore it entirely, you risk further penalty.
Failure to pay the IRS
If you pay the amount when the IRS asks, you won’t see added interest.
If you feel you cannot take care of it, the letter lists steps to take.
.5% per month in interest in charged and that amount can go up to 25%.
You could lose your house and car if you fail to pay your taxes.
If you cannot pay there are things you can do.
You could set up a payment plan using an online application through the IRS.
You may also ask for a temporary delay of collection if you’re experiencing financial issues.
If you feel the letter is incorrect, you can contact the IRS to prove it with documentation.