IRS Resolution
Dealing with IRS notices, audits, and tax debt resolution
3 questions answered in this category
I got a letter from the IRS. What should I do?
Don't panic, most IRS letters are routine. First, open it and read carefully. Note any deadlines (usually 30-60 days). The letter type (CP2000, CP14, etc.) tells you the issue. Many are simple fixes: a missing form, a math error, or an automated adjustment. Respond within the deadline. If it's serious (audit notification, large balance due), get professional help immediately.
How do I find out how much I owe the IRS?
Create an IRS online account at irs.gov to view your balance and transcripts. You can also call the IRS directly at 1-800-829-1040 (expect long hold times). For a complete picture including all tax years, request an Account Transcript for each year in question. Your balance includes original tax, penalties, and interest, which accrues until paid in full.
Can I negotiate with the IRS to pay less than I owe?
Yes, through an Offer in Compromise (OIC), but historically only about one in three offers is accepted, and recent years have run closer to one in five, and you must prove you can't pay the full amount. The IRS calculates your "reasonable collection potential" based on income, assets, and future earning capacity. More commonly, taxpayers set up installment agreements, request penalty abatement, or prove Currently Not Collectible status. The key is demonstrating financial hardship with documentation.