December 16, 2018

I Just Received a Tax Delinquency Letter. How Long do I Have?

The answer to this question depends on how much you owe and what the notice says.

IRS Tax Debt

Here are the notices you are likely to see:

“Request for Payment” notice – sets out the details of the claimed balance and demands payment in 10 days. This notice must be issued before the IRS can file a tax lien;

Notice 501 – Reminder Notice

Notice 503 – Urgent, immediate action is required. This notice is sent approx. 5 weeks after Notice 501.

Notice 504 – Urgent, We intend to levy on certain assets. Please respond NOW. This notice is sent approx. 5 week after Notice 503

Letter 1508 – FINAL NOTICE, NOTICE OF INTENT TO LEVY AND NOTICE OF YOUR RIGHT TO A HEARING. PLEASE RESPOND IMMEDIATELY. If no payment is made, payment arrangements formalized or appeal rights exercised, a levy can be issued after 30 days.

Note, however, that if the tax due is large, if the liability arises from payroll taxes or if the taxpayer has a previous history of non-compliance, this process may be accelerated and fewer notices may be issued.

Notice of Levy – usually issued 6 weeks after date on Letter 1508. Levy is a seizure on the taxpayer’s bank accounts, wages, accounts receiveable or other liquid assets. Certain assets and property are exempt from levy.   Click here to read IRS Code Section 6334, which identifies assets that are protected from levy.

Georgia Tax Debt

Proposed Assessment Notice – this means that the Georgia DOR believes you owe additional taxes.   We can dispute this proposed assessment by completing and submitting Form TSD-1.

Official Assessment and Demand for Payment – this represents an official ruling by the Georgia DOR that you owe a tax debt.  You will be given 30 days to submit payment.  If you fail to pay within 30 days, a tax execution will likely be issued that subjects you to wage garnishment and/or bank account levy.  In addition a 20% penalty called a “cost of collection” fee will be added to your liability.

 

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Jonathan Ginsberg

Attorney at Ginsberg Law Offices
Attorney Jonathan Ginsberg helps taxpayers work out negotiated settlements of tax debt with the IRS and Georgia Department of Revenue.

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