Explanation of IRS Letters 1961C - 2603C

Letter 1961C: Installment Agreement for Direct Debit 433-G

What this IRS Letter Means

This letter is in response to an oral or written request that you or your tax representative made for a Direct Debit Installment Agreement. It explains the fees associated with establishing this type of agreement and what actions you need to take to qualify for the Low Income Fee Reduction.

Actions You Need to Take

You need to complete Form 433 and return it to the IRS. Be sure to include your bank account and routing numbers. You should return this information to the IRS as soon as possible and remember to contact your tax representative if you have one to inform him or her of your actions.

Keep in mind that your Installment Agreement with the IRS is not set up yet. If you do not finalize your arrangement to pay the balance you owe, enforced collection action may be taken to collect the amount you owe, including the filing of a Notice of Federal Tax Lien, or garnishment of your wages and/or bank accounts. Sometimes taxpayers do not finish this process completely, and end up with major tax problems down the road. Be diligent in returning requested information promptly to the IRS!

Letter 1962C: Installment Agreement Reply to Taxpayer

Why You Got this IRS Letter

This letter confirms that your written request for a Direct Debit Installment Agreement has been approved by the IRS. Good news! It also explains the fees the IRS charges for establishing your agreement as well as what to do if you qualify for a Low Income Fee Reduction.

What to Do Now

The important thing to know is that you have to make one manual payment before the IRS can begin to receive your payments electronically. Most taxpayers miss this step, which causes them to have a late payment and thus incur additional interest and penalties. Please avoid this mistake and be sure to make your first tax payment manually via calling the IRS or mailing them a check.

After this manual payment, there's really not much left for you to do. Be sure to have the amount of your payment in your checking account by the due date in the letter. If you are unable to have sufficient funds in your checking account, you must call the IRS at least 10 days prior to your payment due date.

If you do not ensure there are sufficient funds in your checking account, then your installment agreement will default, plus your bank may charge you fees for insufficient funds. If this happens, you may want to contact a tax professional to re-establish your installment agreement with the IRS and to begin negotiating away the additional fees you incurred.

Letter 2050 (LT16): Call the IRS about Your Overdue Taxes or Tax Return

Why You Got this IRS Letter

You have received this letter because you did not respond to previous notices sent to you by the IRS concerning your late tax payments or tax returns. The IRS is warning you or your tax representative to call them immediately, or enforcement action may be taken against you to collect the taxes you owe.

How to Fix this Tax Problem

Contact the IRS or a tax professional immediately to resolve your late account and to avoid collection action. You have no more than 10 days from the date on the letter. Enforcement action including levy on your wages, bank accounts, federal payments or state tax refunds may result if your balance is not resolved.

If you are unable to pay in full, a monthly payment plan may be available, or collection may be delayed if you are unable to pay due to financial hardship. Please be ready to discuss you income, expenses and assets owned if you feel that you are unable to pay. Proof may be requested as well. Depending on your situation, it may be advised to seek professional advice and representation to ensure your tax issue is handled correctly, promptly, and in your best interest.

If you have already paid or arranged for an installment agreement, you should still call the IRS or your tax representative to make sure your account reflects this.

Letter 2257C: Balance Due Total to Taxpayer

What this IRS Letter Means to You

This letter is the IRS's response to your request for a pay off amount for any balance due account you have. The total reflected in your letter is how much the IRS is seeking so that you can close out your tax debt with them and move on with your life.

Okay, Now What?

Now that you know how much you owe, you should pay the amount indicated by the date provided in the letter.

If you cannot make this payment you should call your tax representative or even the IRS directly to make other arrangements to pay. Please take this final step if you do not have the money to pay off your tax debt in full, because there are several options that are available to you depending on your exact circumstances.

Letter 2271C: Installment Agreement for Direct Debit Revisions

Why You Received this IRS Letter

This letter has to do with your request to make a change to your Direct Debit Installment Agreement. The IRS has rendered a decision on your request, which can be found in this letter.

How to Resolve your Tax Problem

At this point, you and the IRS should have reached a new agreement as reflected in your letter. You need to ensure that you have sufficient funds in your checking account to cover the upcoming debit payments. The letter tells you the date the IRS will debit your checking account, so plan accordingly.

As always, if your installment payments are not received as agreed, the IRS can proceed with enforcement action and may file a levy on your wages or bank account or file a lien on your personal property. You will want to avoid this if at all possible, so if there is a problem with your agreement or you can't pay on time, be sure to contact a tax professional who can outline all of your options available and then work for you to ensure your tax problem is resolved correctly and on time. You can also call the IRS at the number given in your letter to seek tax help from them directly.

Letter 2272C: Installment Agreement as Proposed is Rejected

What this IRS Letter Tells You

This letter explains to you why the IRS cannot establish the installment agreement you had previously proposed to them. You will need to pay your tax balance another way, or provide the IRS with more information so that they can then accept your proposal for an installment agreement.

What to Do to Resolve this Tax Problem

Provide the IRS with the information they are requesting in the letter you received, or provide them with an explanation as to why you cannot.

This part can be tricky since they are looking for specific information in a specific format, and so depending on the amount of time you have and the quality of your records, you may find it beneficial to contact a tax professional to ask for tax help on how exactly you should move forward. If you have provided the information the IRS requested within the last 45 days, you should call the number on the letter to verify your case is being re-considered.

The letter provides you a specific amount of time you have to gather the requested information and return it to the IRS. However, responding quickly will resolve your account issue sooner. The law allows the IRS to proceed with enforcement action which could result in a levy on your bank account or wages, or liens on personal property, so be sure you work quickly.

Another Option You Have to Reach Resolution

Because your installment agreement proposal was rejected, the letter provides you with information on how to appeal the rejection. This may be your best option if you feel like the IRS is not being fair or that your proposal is not being treated fairly. Again, it is often advised for taxpayers to seek professional tax help so that your case is handled properly, especially if the tax debt being considered is a large sum of money.

Letter 2273C: Installment Agreement Accepted: Terms Explained

What this IRS Letter Tells You

This is a good letter to get! It is telling you that the IRS has accepted you or your tax representative's request to pay what you owe IRS in installments. The letter contains a specific dollar amount for you to pay each month and when your payment is due.

The letter goes on to detail the address that your payments should be mailed to. In addition, you are provided a dollar amount for the necessary fees the IRS charges to establish an agreement. The letter will also provide instructions on how to apply for the Low Income Fee Reduction, which you may or may not qualify for depending on your situation.

What to Do Next

Your agreement has been accepted, so all that's left is for you to pay the IRS by the due date given in the letter.

If you chose to mail in your payment, be sure to send it 5 days prior to the due date. The letter tells you what items you need to put on your check so it can be correctly identified and applied to your account. It is important to include all of the information the IRS is asking for, or else your payment will not be credited to your tax account properly.

There are more convenient ways to submit your subsequent payments. Remember you are now obligated to make recurring payments to the IRS until your tax balance is fully paid off, and any missed or late payment will result in penalties and late fees. A tax professional can give you a list of alternative ways to submit payment so that you don't have to remember to mail a check each month.

The Cost of a Late Payment

If you fail to make your payments, enforced collection action may be taken to collect the amount you owe, including the filing of a Notice of Federal Tax Lien, or garnishment of your wages and/or bank accounts. The IRS will get paid one way or another, and it is our experience that paying them up front is the best course of action.

The IRS tax debt you owe is not like other outstanding bills you may have. You are required to make a timely payment even if you do not receive a reminder notice. Do not wait to be reminded to pay, because the IRS can and does begin collection activity without warning after falling behind on an installment agreement.

Letter 2318C: Installment Agreement: Payroll Deduction (F2159) Incomplete

What this IRS Letter Means

This letter is telling you that you still have some things to do before your proposed installment agreement by payroll deductions is finalized and acceptable to the IRS. It also explains the necessary fees charged for paying monthly.

What You Need to Do

You need to get your employer's signature on the form referenced in the letter you received.

Your employer signature means that the company you work for agrees to deduct a specific amount from your pay check and send that amount to the IRS. Once you have this form signed, you must send it in to the IRS. We also recommend that you follow up with the IRS in a week or two to verify that your payroll deduction has been established.

The letter provides you a specific time frame to respond and get the forms signed and returned. If you do nothing or are late, enforced collection action may be taken to collect the amount you owe, including the filing of a Notice of Federal Tax Lien, or garnishment of your wages and/or bank accounts.

Letter 2357C: Abatement of Penalties and Interest

Why You Got this IRS Letter

This is a unique IRS letter. Doesn't it seem surprising that the IRS would send you a notice that they made a mistake? Your letter is informing you that the IRS failed to send you the balance due notices that they should have sent you. As a result, the interest and penalties the IRS had charged you have been removed. You still, however, owe a tax balance that must be paid.

What to Do Next to Resolve this Tax Problem

If you agree with the tax balance the IRS has shown in the letter, you should pay the balance due as soon as possible. The letter provides you the specified date that your full payment is due by.

If you do not make arrangements to pay the balance you owe, the IRS can proceed with enforcement action and may file a levy on your wages or bank account or file a lien on your personal property. There are several possible things that you can do if you cannot pay your tax debt in full. You may want to contact a tax professional or work with the IRS directly on your own to learn what these options are and which one is in your best interest. Oftentimes, getting the appropriate tax help you need can make all the difference in this confusing situation.

In addition, you can appeal the IRS's determination of your tax balance if you feel like it is inaccurate. This can be a long process and require substantial paperwork, but if the difference between the total you think you owe and what the IRS says you owe is large, it can be well worth it to appeal the tax debt.

Letter 2603C: Installment Agreement Accepted - Notice of Federal Tax Lien Will be Filed

Why You Got this IRS Letter

This letter is telling you two things. First, that the IRS has accepted your proposed installment agreement. Secondly, that as part of this agreement the IRS will file a Federal Tax Lien on your personal property.

How to Fix this Tax Problem

Now that your installment agreement has been accepted, you need to make your monthly installment agreement payments on time every month. Your letter provides you with the details of how to submit your payments and when they are due.

The letter also provides you the date the lien will be filed. There are several options you may have available to you at this point, depending on your situation. You will probably find it beneficial to speak with a tax professional to get the tax help and insight you need to fully understand these options and to pick your best course of action. If you do not take any action, the lien will become part of public record.