﻿IRS Notice CP14 is a Notice of Tax Due and Demand for Payment. Along with the CP2000,
it is probably one of the most common notices that the IRS sends out to taxpayers. You can
see a simple CP14 Notice right here on screen, and in this video I’m going to tell you some
reasons why you may have received a CP14 Notice, then I will go through this notice part by part
so that you can understand the CP14 Notice you received in full, and then later on in
the video I’ll tell you exactly what to do if you receive a CP14 Notice. So the most common
situation in which the IRS will send you Notice CP14 is when you filed your tax return for the
year in question but you did not pay, in full, the amount due indicated on the tax return,
including penalties and interest. However, there are other situations in which the IRS may send
you Notice CP14. For example, if you filed your Form 1040 after the due date and paid the tax
indicated along with the return, you may think that you do not owe the IRS any money. However,
because you filed your return and paid your taxes late, the IRS will likely have assessed both a
failure-to-pay penalty and a failure-to-file penalty, thus creating a balance due. The IRS
will likely also have charged interest to your account for the late payment. In this case,
even though you paid to the IRS the tax liability indicated on your return, you may still have a
balance due on your account for the year due to the penalties and interest, and therefore the IRS
may send you a Notice CP14 for the year. Finally, the IRS may have sent you a Notice CP14 in error,
such as if you paid the tax due indicated on your return timely but the IRS did not properly credit
your payment to your account. Alright, let’s now go through the CP14 Notice part by part and then
I’ll talk about what to do if you received a CP14. So the first part of the CP14 Notice
is the billing summary. In this part of the notice, the IRS breaks down for you the total
amount they believe you owe. This breakdown could include items such as your total tax liability as
indicated on the tax return you filed or as corrected by the IRS, payments and credits on
your account for the tax year, penalties assessed by the IRS, such as the failure-to-file penalty,
failure-to-pay penalty, and/or the failure-to-pay estimated tax penalty, and finally the amount of
interest the IRS has charged on your account. Note that the penalties and interest amounts
will increase the longer you delay taking care of this issue. The next part of the CP14 Notice
is the part where the IRS tells you what they want you to do. And naturally, the IRS wants
you to pay the amount indicated on the notice within 21 days if the amount you owe is less than
$100,000. So you can see on this sample notice, the notice date was March 2, and the deadline for
when the IRS wants this individual to pay is March 23, that’s 21 days. If the amount you owe on the
notice is $100,000 or more, the IRS wants you to pay them within 10 days. The IRS also mentions the
possibilities of paying off your balance via an installment agreement and gives some instructions
on what to do if you think the IRS made a mistake in the CP14 Notice. I have a whole video for you
on IRS installment agreements, you can check out that video by clicking right up here,
the link is also at the bottom of the screen. Next, the IRS tells you what they will do if
you don’t respond, namely, continue to charge you penalties and interest. And after that, the IRS
gives you a breakdown of how they calculated the penalties listed out in Part 1. As it sounds, the
failure-to-file penalty is assessed when you fail to file your tax return by the original due date
of the return or, if you filed a valid extension of time to file your return, by the extended due
date of the return. This penalty is calculated as 5% of the tax due shown on the return per month
or part of the month your return is late, up to a maximum of five months. The failure-to-pay penalty
is assessed when you fail to pay the taxes you owe by their due date — generally April 15 of the
following year for most individual taxpayers. This penalty is calculated as 0.5% of the tax
you owe per month or part of the month you have an outstanding balance, up to a maximum of 50 months.
You may also see the estimated tax penalty on there as well. The IRS expects you to pay your tax
liability in four equal installments throughout the year; these payments are known as your
estimated tax payments. And if you don’t pay in your taxes throughout the year, the IRS may impose
a failure to pay proper estimated tax penalty on you. Next, the IRS gives some basic information
on how to possibly contest the penalties you have been charged. And last but not least,
the IRS shares with you how they calculated your interest charges. Now, let’s talk about what you
should do if you receive a CP14 notice. This is just a quick summary, if you want more information
on how to contest things with the IRS, be sure to watch my video How to Fight the IRS and Win, link
to that video is at the top of the screen and in the description below. But in summary, the first
thing you should do when you receive a CP14 is you should check it for accuracy. It shouldn’t be
any surprise to you that the IRS can make mistakes from time to time, so be sure to review the IRS’s
calculations on the CP14 Notice and make sure that everything looks accurate to you. And then,
if you find something you disagree with, take it up with the IRS. The CP14 Notice itself provides
you with the phone number you should call if you disagree with something in the notice. Obviously,
getting through to the IRS right now is very difficult, so feel free to reach out to us
at Choice Tax Relief at 866-8000-TAX, that’s 866-8000-829, if you’d like us to investigate
your case for you — our staff is on the phone with the IRS all day. Then, after you’ve checked the
CP14 Notice for accuracy and either 1) found it to be accurate or 2) corrected any inaccuracies
with the IRS, you should at least try for penalty abatement. I plan on creating a video on penalty
abatement in the coming weeks explaining how to do that in detail. And then at this point, you and
the IRS should be in agreement as to how much you owe (assuming there’s still a balance remaining
after you’ve taken these initial steps). So now you have to figure out how to deal with this
balance. First, you probably want to determine if you qualify for an offer in compromise. This is
an agreement with the IRS to settle your debt for less than you owe. I have created several videos
on this channel about the offer in compromise, if you don’t know much about the offer in compromise,
watch my video on offer in compromise basics, link to that video is at the top of the screen
and in the description below. Now, if you don’t qualify for an offer in compromise,
you have other options. One of those options is to obtain a temporary pause on having to pay the IRS
what you owe based on hardship. This is known as currently not collectible, or CNC, status, I have
a video covering the basics there as well, link to that video at the top of the screen and in the
description below. Then of course you could set up an installment agreement with the government.
Depending on how much you owe, there are some maybe not-so-obvious strategies here on, say,
how to avoid a lien when getting an installment agreement, so keep that in mind. But if you don’t
qualify for an offer in compromise or CNC status and the prospect of an installment
agreement doesn’t really attract you unless it’s a partial-payment installment agreement,
where you actually end up paying the IRS less than you owe, I do talk about those in my installment
agreement video, but if none of those options will work for you, then really you will need to
pay off your balance in full to avoid any future accrual of penalties and interest. You can pay
online at irs.gov/payments, you can also send in a check with the voucher found at the bottom of the
first page of the CP14 itself. But if you don’t do anything and you go long enough without dealing
with this issue and without addressing it, the IRS will eventually start taking forced collection
activity against you through wage garnishments, bank levies, and things like that. But I don’t
want that to happen to you. If you have found yourself at the mercy of the IRS and you would
like a professional in your corner, please give us a call here at my company, Choice Tax Relief,
at 866-8000-TAX, that’s 866-8000-829, or visit us at choicetaxrelief.com where you can book a free
consultation, I also have some more tax relief videos for you to watch here on the left-hand
side of your screen if you’d like to learn more about this stuff because stuff is definitely not
common knowledge, I also have a free report for you to download, you can click the button right
below my face here, it’s a report on 7 Tax Secrets the IRS doesn’t want you to know,
so lots of fun stuff for you to absorb here even at the end of this
video, which thank you for watching, and l will see you in the next one, buh-bye.