The CP14 or Balance Due notice is what the IRS sends to you when you fail to pay your owed taxes. If you file your tax return without paying the taxes you owe, you’re going to get a CP14 Notice from the IRS. This notice is made to request payment from the taxpayer. Like other IRS notices, failure to respond and take necessary steps on this notice can put you in very tough and complicated situations.
The CP14 notice does not leave you in the dark as to the penalty you owe for failing to pay your tax by the filing deadline. Some of these notices come along with an estimated tax penalty if you didn’t withhold enough in taxes or make estimated tax payments throughout the year.
This all already sounds scary and complicated but it doesn’t have to be if you handle it properly or get a tax professional from us to help you with that. Below, we’ll provide you with stepwise instructions on what to do when you receive CP14 notice.
The first thing to do is to go through the notice thoroughly, scrutinizing the information provided to confirm that you actually owe the balance the IRS says you do. You can also go through your return to see if it’s missing any credits or deductions. This can qualify you to file an ammended return to bring down your tax bill.
If after going through the notice, you confirm that the information is correct and you actually owe, the next step would be for you to just pay everything you owe immediately. But we know that it’s not always that easy as you may not have the money ready. If you’re in such a situation, there are options available to you and you can explore any of them.
– You can request an extension. You are allowed to ask for up to 120 days more to provide you more time to get the money together and pay the irs.
– If you can not pay at all or can not get the money in 120 days, the next option that comes to mind would be to ignore the balance. Except that, that is a very wrong move that will boomerang. The irs has provisions for people who do not have the ability to pay. Some of the provisions include; deferred payment (currently not collectible status), payment plans like installment agreements, and settlement (offer in compromise).
These provisions are not for everyone and are unique, depending on the individual’s financial situation. You have to look closely and choose the payment plan that suits your situation in order to avoid liens and levies.
Hiring a tax professional can help determine the best option for your situation.
