by Irs Tax Settlement

Created on: August 23, 2010   Last Updated: August 25, 2010

IRS Notice CP-11 - Understand What it is & How to Prevent Tax Debt

Just like the CP-501 and CP-503 Notices, The IRS sends out CP-11 to notify taxpayers that they owe the IRS a Tax Debt and it asks them repay the debt in full. Unlike other IRS notices, The IRS Notice CP11 is used to inform the recipient that changes have been made to their original 1040 Tax Return that resulted in them owning a Tax Debt to the IRS. Your CP-11 Notice lists the changes word by word and consists of an official request for total settlement of the Tax Debt. Before you submit payment to the IRS along with the envelope included in IRS Notice CP11, do your research to make sure you actually owe the IRS. You may not owe them after all!

But I Filed my Taxes on Time!

You filed your taxes on time and followed the IRS rules, so it doesn't feel fair to receive an IRS Notice in the mail informing you that you owe money. Nonetheless, you could have created an error the IRS was required to remedy, resulting in you actually owing the money claimed within the IRS CP-11 notice. The IRS can make mistakes in this regard as well, if you feel that you do not owe the IRS, work with a tax debt professional to prove your point and have the tax debt reduced or removed.

How Soon do I have to Pay the IRS?

The IRS Notice CP-11 states that payment is requested immediately. If you have no idea what to do at this point in time you should work with a professional for guidance.

When do I have to pay the IRS?

The first thing and arguably the only action the IRS wants you to take is to pay the amount in the IRS Notice CP-11. The notice includes a payment envelope for you to do so. You could attempt to contact the IRS form here if you're unable to pay, but they'll expect you to repay your tax debt in full. No matter what you decide to do, it's paramount that you reply to the IRS as soon as possible. You never know when your small Tax Debt will grow into an enormous one, once interest and penalties are added to the account.

What happens if I don't pay the IRS?

If you decide not the pay the IRS, the first action you can expect is a Tax Lien. This gives the IRS legal claim to your home and security for payment of your tax debt. You will not be capable to put your house on the market or sell you cars, and none of your precious possessions will likely be entirely safe from IRS seizure as long as you owe them.  When your Tax Lien is filed it’s basically a "kiss of death" for your credit report, possibly giving you hard-to-repair bad credit for years to come. Your current financial life will probably be ravaged. If you don't want a Tax Lien to be filed against you, it's important to act immediately when you receive the IRS Notice CP-11 in the mail.

I had no Idea I owed until I got the CP-11 in the mail, I have no money!

If you truly feel you don't owe the IRS and you have no money to pay them, you have a good case for a tax professional to work with. You may not have money put aside to pay your taxes with when you receive a CP 11 Notice in the mail. It's important to work with a Tax Professional to negotiate your case for not being able to pay to the IRS. A good Tax Relief Service can help negotiate an IRS payment plan, an IRS Settlement, a short-term respite from collection activities (Currently Not Collectible Status) or even finding a loophole that gets rid of tax debt completely. It's well worth your time to simply speak with a tax debt professional or a professional tax debt company. You never know how much you'll save!

Learn more about this author, Irs Tax Settlement.
Click here to send this author comments or questions.