IRS

This week we continue our look at common IRS letters and notices. Letter 525, sometimes called the 30-day letter, is a notice of proposed adjustment to your return. It is called a 30-day letter because you only have a 30-day window to respond to it.

Last week, we looked at CP504, the warning the IRS gives before issuing a levy. This week, we are looking at Form 668-A. The IRS will send this form to both the taxpayer and the business that will have to turn over the taxpayer’s property, such as a bank.

We recently discussed the differences between a lien and levy here, but how do you know when the IRS will levy your property? Before levying a taxpayer’s property, the IRS must notify the taxpayer of the outstanding balance and the pending levy action.

Most people are aware that cash transactions for $10,000 or more have to be reported to the IRS to help identify and prevent money laundering activities. For cash-based businesses, this reporting requirement can be burdensome, so people will try to arrange payments in such a way as to avoid the $10,000 limit.