IRS Notice CP39 is a notice sent by the IRS to inform you that your present or former spouse’s refund has been taken and used to apply to other taxes.
For some people, this notice is their first hint that a tax debt existed. They had the conception that all previous tax returns had been completed correctly and submitted on time, so where did this surprising liability come from?
If you had no idea of the problem until now, there are a few details available to you.
Why did I receive a CP39 Notice from the IRS?
If the IRS sends out a CP39 Notice, it is normally because the IRS is bringing to your notice you that it applied a refund owed to your spouse or former spouse towards your past due tax debt. The notice will normally also give you details on how much tax you still owe, if any.
This could affect any Innocent Spouse, Separation of Joint & Several Liability that you are involved in, also as IRS Tax Litigation or Tax Collections actions.
Filing an Innocent Spouse Claim
The benefit that follows after requesting innocent spouse relief is that the IRS may pardon you from any responsibility of paying taxes and any accrued interest or penalties if your present or former spouse made mistakes on your tax return.
To be eligible, you must file Form 8857 and satisfy the following criteria:
- The joint return that you filed contains errors filled by your spouse.
- As at the time it was signed by you, you had no idea or had no reason to know that it contained incorrect or false information.
- There are facts and circumstances that propose that it would be unfair to hold you liable for the tax debt.
- Neither of you transferred the property to one another to deceive the IRS nor any other third party, such as a creditor.
You can search for relief from duties sprouting up from individual or self-employment income taxes. Business taxes, household employment taxes, and Individual Shared Responsibility payments are not eligible.
Request a Payment Arrangement
If it was found out that the Notice CP39 was not a mistake and you do have an outstanding tax liability, you will need to pay attention to it immediately to avoid interest and penalties from accruing. The letter will indicate the due date for paying the balance- if you need to request an extension more time, call the number listed.
If you are not buoyant enough to pay the total amount you owe, the following options may be available to you:
- Payment Plan
You can setup a payment plan with the IRS in such a way that you can repay the amount you owe over time. In order to be eligible, you must have filed all of your returns and be updated on your taxes for the current year. If you owe $10,000 or less with interest and penalties and have filed and paid all taxes for the last five years, you are officially entitled to apply for the guaranteed installment agreement, which offers you three years to pay the arrears in full.
Based on your income and how you propose to make the payments, the fee for acquiring an installment agreement ranges from $43 to $225. If you are a low-income taxpayer, this fee will be put aside if you agree to make electronic debit payments.
Offer in Compromise
Although it is not easy to qualify for an Offer In Compromise (OIC). It lets you pay up the debt for less than the total balance which you owe. The IRS will only consider an offer if any of the following conditions relate to your case:
- Depending on your income and reasonable expenses, there is uncertainty that they will be able to collect the full amount before the collection statute expiration date.
- There is legitimate uncertainty that you owe that much tax.
- Collecting the tax would lead to an unjust degree of economic hardship.
If you want to make an offer in compromise, it is important that you work with a dedicated tax law firm that is skilled in helping taxpayers overcome liability challenges because the IRS takes so many factors into account before accepting an OIC.
Speak with a Tax Attorney
When you receive an IRS Notice CP39 about a tax debt you didn’t know you had, the worst thing you can do is ignore it. Get a tax expert who will work with you to analyze potential solutions and aid in restoring you to compliance if you have any outstanding returns.
On a final note, whenever you receive a CP39 Notice, you should:
- Carefully read the IRS CP39 Notice, especially the portion stating the amount of your spouse or former spouse’s refund that the IRS applied to your past due tax debt.
- If you do not agree that your former spouse is not to blame for your tax debt and that the portion of his or her refund that the IRS applied toward your debt was a mistake, contact a tax professional like for guidance on what to do, and if you should take any action, how to make this known to the IRS in a way that is the least likely to spark further investigations by the IRS. In addition to doing what is right or decent, trying to absolve your former spouse from responsibility for a tax debt you believe is not his or her responsibility can have the additional benefit of discouraging your former spouse from giving the IRS the information about you that could lead to further IRS inquiry about you.
- If you owe a past due tax debt, pay the total sum by the date specified in the notice to prevent incurring extra interest and penalties. If you find it difficult to pay the full amount by the date stated in the notice, contact a tax professional for help in working out a payment plan with the IRS.