When you receive notice of an IRS debt, you quickly learn that time is against you. The IRS expects prompt action and payment on your part, despite the fact that you likely have a few questions about why you have a bill. While you need to be timely, you also want to make sure that the notice you have in hand is accurate.
Regardless of how overwhelmed you may feel, there are some decisive and immediate steps you can take to resolve the issue. While some tax issues may take some time to handle, the lion's share of your work can be completed within 48 hours. If you can tackle a few key items within this timeframe, the final resolution to your tax problem should be relatively painless.
You'll want to take note of the amount the IRS says you owe, the explanation for the balance and the tax year associated with the liability. In all likelihood, you will be able to determine the validity of the notice by comparing it with information found on the tax return in question. If you disagree with the assessment, you may prepare and send in documentation which supports your argument. In the event the notice is accurate, you'll want to consider your payment options.
You may have options to immediately pay your tax balance. Maybe you have the money in savings or there's property you can sell for quick cash. You certainly don't want to rule out your borrowing options, either, as the interest rate you get from an equity or personal loan may be far more amenable than the terms offered by the IRS (interest and penalties accrue monthly). If you have no way to obtain the full sum of what you owe, you'll need to determine the most appropriate, alternate resolution.
Fortunately, even if you can't pay your tax debt off at once, there are a number of IRS plans for which you may qualify. Additionally, you can likely determine which plan is right for you based on how much you owe and how much you can afford. Your liability can be broken into monthly payments, for instance, with an installment agreement. If your goal is to stay within your 48-hour window, you may find it helpful to get a professional opinion.
Tax professionals know that time is of the essence when dealing with a tax debt. Also, they have experience resolving a variety of IRS issues. While the circumstances of your case may be unique, a licensed tax professional will be able to review the key details and suggest an appropriate solution.
Consulting with a tax pro is definitely to your advantage, as you can get a seasoned assessment for no cost. If you choose to enlist a professional to negotiate your resolution, you have the benefit of knowing it will be handled to completion within the letter of the law. Even if this process takes a month, you'll have taken the crucial steps within two days of receiving your notice. The more proactive you are in addressing an IRS issue, the greater the chance that you'll be perceived as a concerned and cooperative taxpayer.