Have you ever had a heart-stopping moment when you saw “IRS” on an envelope in your mailbox? You’re not alone. At Edgewater CPA Group, we understand how intimidating it can feel to receive an unexpected notice from the Internal Revenue Service. But fear not! This guide is here to demystify the five IRS notices you need to know about as a small business owner. We aim to help you keep calm, informed, and prepared for any tax-related surprises that might come your way.
1. CP501 Notice
The CP501 Notice is essentially a friendly reminder from the IRS. It indicates that you have a balance due on one of your tax accounts. Think of it as a polite nudge to make a payment or set up a payment plan if needed. Addressing this notice promptly can help you manage your tax responsibilities smoothly and avoid further complications.
2. CP2000 Notice
If you get a CP2000 Notice, it signals that there is a mismatch between the income reported on your tax return and the income database held by the IRS. This is not an audit, but it does require your immediate attention. Double-check the figures and provide any necessary additional documentation to clarify the discrepancy.
3. CP523 Notice
Receiving a CP523 Notice means your installment agreement is in danger of being terminated due to missed payments. This can lead to more severe penalties or enforced collection actions. Acting swiftly can help you rectify missed payments and keep your installment agreement intact.
4. CP60 Notice
A CP60 Notice is sent to inform you that the IRS has removed a payment erroneously applied to your account. This notice is typically sent when the IRS receives a payment intended for another taxpayer, and it was mistakenly posted to your account. If you receive this notice, verify the payment history on your account and contact the IRS if needed.
5. LTR1058 or LT11 Final Notice
The LTR1058 or LT11 Final Notice is the IRS’ intent to levy on your assets due to unpaid taxes, potentially leading to seizures if unresolved. The gravity of this notice can’t be overstated. Contacting a tax professional like Edgewater CPA Group can guide you on how to protect your assets and rights best.
Your Trusted Financial Partner
Facing IRS notices might seem daunting, but remember that understanding them can save you trouble and money in the long run. At Edgewater CPA Group, we specialize in turning these stressful moments into opportunities for growth and stability. Beyond tax preparation, our comprehensive services in accounting, bookkeeping, and business strategy can equip your Carmel, IN, business with the tools needed for success. Call us at (317) 386-7021 to schedule your consultation, and let’s navigate the complexities of taxes together!