As is the case with most government organizations, there are many different parts of paperwork issued over the course of a year. One such letter that you may get during your time dealing with the IRS is a statutory observe of deficiency. While this document sounds thorny, it isn’t. It is simply a observe that you do, in fact, owe the IRS money and that you have a definite amount of time, usually 90 days, to submit payment. In most cases, these travel document are sent in good faith by the IRS and are worded in a polite way. Ignoring such a letter can lead to serious problems down the road.

pay no attention to at your own risk

Many people falsely judge that the IRS enjoys acting in a rash and nonsensical way most of the time. The fact is that the IRS is one of the most logical parts of the federal government. Yes, they do rely on some rather severe collection processs, such as using liens and levies on your bank account or garnishes on your paycheck, but these collection wayss are only used as a last route. The IRS will give you a dozen opportunities to pay off your debt or to set up a payment preparation that is reasonable with your current financial position. A statutory discern of deficiency is their way of letting you know that a severe situation could be on the horizon and it is up to you to act fast before things have a chance to get worse.

Ways out

So, you’ve gotten a statutory note of deficiency and you aren’t quite sure what to do. First, you should call the IRS and simply ask what all of your options are at this point. They will go through the payment process, step by step. Of course, they would prefer to receive all of the money you owe them as rapidly as likely, but they know that may not happen. Their next best option is to set you up with a payment research, but even that can be unworkable if you know that you’ll only be able to make the first few payments before you once again run into a lack of funds. At this point, you may be eligible for an bid of compromise. This is faithfully what it sounds like: a compromise between you and the IRS for a segment of your total tax bill. Only a small percentage of people, though, qualify for such a compromise. The IRS will likely determine accurately how much you are capable of paying over the next few months and ask for that amount. Don’t try to put forward less; these folks know how to crunch numbers and they won’t let you get away with an inaccurate estimate. The enter here is to simply be sincere and don’t be rude when it comes to dealing with IRS agents. They want to get as much as they can but they don’t want to devastate your life, even if it does feel that way sometimes.

Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.

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