What does the CP521 notice mean and how does one respond to it?
When a taxpayer owes the IRS, the IRS immediately begins to contact the individual by sending a reminder notice or reminder letters in a bid to collect what the person owes. The IRS contacts people through notices and failing to respond appropriately to these notices or pay the IRS comes with costly consequences, as the IRS can take extreme collection actions. These actions can range from wage garnishment to placing a tax levy on your assets.
When you owe the IRS, it is best to nip the situation in the bud by paying immediately or contacting them to make a payment agreement. Installment payment plans are an option available to you, however, you should consult a qualified tax professional before you decide to go with that.
Installment payments mean that you will pay what you owe in little chunks monthly until your debt is settled. How does the CP521 come in?
The meaning of the CP521 or reminder notice
If you have received a CP521 reminder notice, you need to keep reading.
This notice is basically self-explanatory. It is a cue from the IRS informing you that it is time for your monthly installment payment. The IRS Notice CP521 should never come as a surprise to you if you have already arranged an installment payment agreement with the IRS previously.
The notice is simply a reminder of the payment due with instructions on how much you should pay and when.
What should you do when you receive the IRS Notice CP521?
Never fall for the temptation of ignoring an IRS notice by just setting it aside. You may not be excited to get a word from them but it is important for you to open it and read it carefully.
The CP521 does not only remind you of the payment due, it also lets you know how much is due and by when it is due. It lets you know that you must pay the amount due by the deadline. If you can not afford to pay at a time, contact the IRS to find out if you can pay little by little.
If you decide to set up installment payments, do not just start on your own. You should contact the IRS to find out what options are available to you and if you agree with them.
How to make monthly installment payments
You should already be familiar with this process if you have been making payments prior to now. If this is your first time, however, you may need to be guided. There are different ways to go about making payment installments to the IRS. You can choose the one that suits you best.
- EFW or Electronic Funds Withdrawal: This option is for people who file their taxes with the assistance of tax professionals or tax preparation software. If you need the assistance of a tax professional, we’re just a call away. Call us now at 888-585-8629.
- Payment from your bank account: You can directly pay from your bank account to the IRS. This is a convenient, highly recommended, and fast option. It is preferred because you can easily track your payments should the need arise.
- Money Order, Check, or Cashier Check: You can opt for this method instead. You will be given an envelope to make use of. And you will tear off the bottom part made payable to U.S. Treasury.
- Use of Credit or Debit Card: This option will require a processing fee. All you have to do is go to the official IRS site and you will find different card payment processors based on your card type.
- Cash: If you prefer doing things the old-school way, you can go to a participating retail store close to you and pay via cash. This option is slow as it takes two businesses days to post and you are expected to set them up in advance before you make payment.
- Same-day wire: For this option, we recommend that you check with your bank first, to know if they charge a fee.
- Electronic Federal Tax Payment System (EFTPS): If your payment is a large sum, this option may be best suited for you. However, you have to enroll before paying.
We do not recommend mail payments unless it becomes really necessary. Your payment will most likely arrive late and take longer to process.
What if you cannot make an installment payment?
If an individual can not afford to keep up with the monthly installment payments, it may still be possible to help them. The IRS may be able to reduce the total amount that the individual has due in tax debts.
The individual must get the necessary documents to prove that their financial situation has gotten very bad since the arrangement for the payment was made.
Contacting the IRS in such a case is very important. Failure to do so will attract more fees, interests, and penalties.
The CP521 form also comes with a list of approximate tax penalties in a notice called notice 746. This list tells you what tax penalties have accrued on your account since it was opened.
It is important to never allow things to deteriorate before you take action. Don’t hide from the tax situation because it looks scary, contact us instead, as there is always a way out. Give us a call today and we will let you know your options.
About Souri, Gazda, & Co.
We are a tax relief firm dedicated to giving you the best results regarding resolving your tax debts. Our team of qualified professionals is available round the clock to provide you with the assistance you need. Contact us now at 888-585-8629 or 617-430-4674 or send us an email at [email protected].
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