Why You Need To Take Your IRS Letter CP503 Seriously
If you still owe tax to the IRS, the CP503 is usually the third notice you will receive. When your business owes tax, it will be the second notice of four. Just as prior IRS notices, this letter notifies you of the tax balance you owe the IRS. It also warns you of the actions the IRS may take if you don’t make the necessary payment arrangements. To stop collection activity and minimize penalties and interests on your account as shown on CP503, ask a tax accountant in Miami to advise on the next steps.
What If You Can’t Afford To Pay Now
Owing the IRS can be frustrating but the worst thing you can do is not acting immediately. Perhaps you cannot afford to pay your tax debt in full now. In such a scenario, the chance to make payment arrangements is still there. However, if you can pay your tax bill in full, you can mail a check to the address provided in the CP503 notice. Include the payment stub and any other details. You may also set up an automatic withdraw or electronic check from your bank account, which is usually free. If you choose to pay with a credit card, however, there is a fee associated with the transaction.
What To Do If You Can’t Pay
For those who cannot afford to pay the whole balance, other options are available. For example, monthly payments or an offer in compromise to reduce the balance are available. You may also secure a hardship and put a stop to all collection activity. Some may have a chance to have their penalties waived. Whatever you do, trying to get the best deal on your own is not such a good idea. It is better if you hire a tax professional familiar with your situation that understands the whole process and can negotiate on your behalf.
When You Disagree With Notice CP503
If you believe notice CP503 has been sent as an error, you may notify the IRS as soon as possible. They usually send you several warning letters prior to that. However, in most cases, the taxpayer can identify any discrepancies before receiving this specific notice. If the IRS CP503 notice is incorrect, and you had already paid your balance or made a payment arrangement with the IRS, you can contact the IRS immediately. You want to make sure the IRS credits your payment to the right account.
What Happens If You Don’t Pay?
IRS notices should not be ignored, especially an IRS notice CP503. If the balance isn’t paid in 10 days, the IRS will continue to add penalties and interests to your account. Also, a Federal Tax Lien may be issued in your name. This is a formal announcement to your creditors that the IRS has the right to stake a claim to your assets. Tax liens used to show up on credit reports but since 2018, the three major credit bureaus remove tax liens from consumer reports. The IRS may start looking for taxes to take (levy) but they generally send out other mail before that. Make sure you make the necessary arrangements to protect your assets and prevent your situation from escalating to the wrong level.
Notice CP503H
This IRS notice is similar to the original CP503 notice. It also lets you know about your debt but it focuses more on your shared responsibility payment (SRP) account, which is the amount you owe when you don’t have minimum health coverage for you or your dependents. This is not this first notice taxpayers generally receive. The CP503H is sent out after several other IRS notices are sent out.
As with the other IRS notice, CP503, you can write a check and return the pay stub on the bottom of the form. You may also contact the IRS to arrange a payment plan. Keep in mind, interest will continue to accrue if full payment is not made within 10 days of the date on the notice. Also, the IRS can’t levy your assets for notice CP503H but they can keep your tax refund and apply to the SRP tax bill. Also, under federal law, a tax lien can’t be issued for this portion of your debt.
Get Help with Notice CP503
If you have any questions regarding a notice CP503, you can contact the number at the top of the page or a tax accountant in Pembroke Pines can contact them on your behalf. An experienced CPA can advise you on the best steps to take in your specific situation. It’s possible to set up a payment plan you can afford, determine whether you are eligible for a settlement, or make other arrangements with the IRS and your state taxing authorities.
Legal Disclaimer
Information Only / No Legal Advice Intended
This publication is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with your own attorney, CPA, and/or another advisor regarding your specific situation.
To ensure compliance with requirements imposed by the IRS, we inform you that any US federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and it cannot be used for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. Always seek advice based on your particular circumstances from an independent advisor. Any disclosure, copying, or distribution of this material, or the taking of any action based on it, is strictly prohibited.
