The IRS has begun sending out collection letters to more than 3.7 million taxpayers in the U.S. who have outstanding bills from 2020 or 2021. Although receiving such a letter may be alarming, the IRS emphasizes that it is not necessarily an indication of an impending audit. Instead, the letter is meant to update individuals on their outstanding balance and provide options for resolving the debt. The IRS recommends carefully reading the notice and following its instructions, including filing any missing tax returns and paying any unpaid balances to avoid incurring interest or penalties. In cases where payment is not immediately possible, the IRS offers payment plans and the option to temporarily delay collection until one’s financial situation improves.
It is important to note that if the outstanding amount was already paid 21 days prior to receiving the letter, it can be disregarded. Despite the initial stress that may come with receiving a collection letter from the IRS, it is essential to carefully review the correspondence and take proactive steps to address any outstanding tax obligations. Additionally, taxpayers who are unable to pay the bill immediately can take advantage of payment plans and temporary collection delays provided by the IRS. Ultimately, the goal of the letters is to help individuals stay informed about their tax responsibilities and to offer manageable solutions for resolving outstanding balances.
