The IRS Letter 728 – Current Balance Due is sent to taxpayers to notify them that they have a current unpaid balance and an IRS revenue officer is requesting payment. This particular letter falls under the category of “unpaid balance”.

REASONS WHY TAXPAYERS RECEIVE THE IRS LETTER 728

There are some reasons why the IRS sends the letter 728 to taxpayers. They include the following:

  • Taxpayers have an unpaid balance due and may also have unfiled tax returns for specific years.
  • The Internal Revenue Service (IRS) sent a taxpayer’s case to a Revenue Officer (RO) to collect any taxes due and obtain any unfiled tax returns for specific years.
  • The Revenue Officer (RO) sent the IRS Letter 728 to notify taxpayers of the current balance due and to request payment. In some cases, the Revenue Officer (RO) may be willing to work directly with the tax representative of taxpayers, rather than require a meeting with taxpayers themselves. If taxpayers want representation before the Revenue Officer, both the taxpayer and his or her tax representative will need to sign an IRS Form 2848 – Power of Attorney and Declaration of Representative and fax or mail it to the Revenue Officer.

REVENUE OFFICER

According to the IRS Definition of Revenue Officer (RO), Revenue officers are IRS civil enforcement employees who work cases that involve an amount owed by a taxpayer or a delinquent tax return.  Their role involves education, investigation, and when necessary, appropriate enforcement. A Revenue Officer (RO) is an IRS employee who focuses on collecting back taxes and pursuing back tax returns. A Revenue Officer (RO) usually handles cases that involve a large amount of taxes ($100,000 or more) and/or multiple unfiled tax returns.

Revenue officers (ROs) typically meet with you and/or your authorized tax representative in person to work toward resolution. It’s important to meet deadlines that the officer sets, provide information, and comply with filing requirements. If you don’t, the revenue officer has the authority to pursue enforcement actions, such as levies and liens, to collect taxes. There is no need for panicking if your IRS account has been assigned to a Revenue Officer (RO). It can be convenient to have one person assigned to your case, rather than speaking to different IRS employees each time you call. Just be sure to respond to all requests fully and by the deadline provided by the IRS.

POWER OF ATTORNEY (POA)

Earlier, we stated that a taxpayer and his or her representative will need to sign an IRS Form 2848 if they want representation before the Revenue Officer. A Power of Attorney (POA) allows a third party to represent you before the IRS. The authorized individual can advocate, negotiate, and sign on your behalf. They can argue facts and the application of law. POAs can receive copies of notices and transcripts of your account. Authorized individuals can include certified attorneys, certified public accountants, enrolled agents, tax preparers, general partners, full time employees, family members, and others. POAs must be in writing.

You can choose a person to represent you in your dealings with the IRS. This is helpful when the IRS is auditing your tax return for a specific year or the IRS has contacted you about an unpaid tax balance that you cannot pay in full or that you do not think you owe. IRS Form 2848, Power of Attorney and Declaration of Representative, allows one or more individuals listed on the form to contact the IRS on your behalf.

The fact that a taxpayer signs Form 2848 does not mean that the taxpayer is relieved of any tax liability. It only gives your tax representative or any other individual designated as your agent the authority to take certain actions on your behalf. These actions include:

  • Receiving confidential tax information.
  • Performing acts that you are able to do, such as signing an agreement with the IRS regarding taxes on returns specified on IRS Form 2848.
  • Signing a tax return in limited situations, such as if you are suffering from a disease or injury or you are continually outside the United States for at least 60 days before the date that a return is required to be filed. In the eyes of the IRS, your tax representative is you.

NOTICE DEADLINE –10 days. If you miss the deadline, the Revenue Officer (RO) can proceed with enforced collection procedures such as filing a federal tax lien and issuing an IRS levy against your wages and/or bank accounts.

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt (in this case, your balance due). The tax lien protects the government’s interest in all your property, including real estate, personal property and financial assets. A federal tax lien exists after the IRS:

  • Puts your balance due on the books (assesses your liability)
  • Sends you a bill that explains how much you owe (Notice and Demand for Payment) and
  • You neglect or refuse to fully pay the debt in time.

IRS levy however, is different from a federal tax lien, which doesn’t take your property, but secures rights to it. A levy is a legal seizure of your property to satisfy a tax debt. An IRS levy is an IRS enforced collection action. When the IRS levies you, the IRS seizes (takes) your income or property to pay a tax debt. The IRS issues most levies after it has made several attempts to collect the taxes with a series of notices.

How to avoid a levy – If you owe the taxes, one way to avoid a levy, or remove an existing levy is to reach an agreement with the IRS to pay your balance due. This means you’ll need to analyze your financial situation and your ability to pay the IRS.

How to avoid a lien – Avoiding a tax lien filing is more complicated than avoiding a levy. The IRS can file a tax lien even if you have an agreement to pay the IRS.