2007 Federal Income Tax Rates
The tax rate schedules shown below are provided so you can see the tax rate that applies to all levels of taxable income for tax year 2007. For detailed tax rates, please refer to this IRS tax table booklet.
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5 Mistakes People Make When Filing Old Tax Returns!
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5 Mistakes People Make When Filing Old Tax Returns!
The tax rate schedules shown below are provided so you can see the tax rate that applies to all levels of taxable income for tax year 2007. For detailed tax rates, please refer to this IRS tax table booklet.
The U.S. Internal Revenue Service is the single largest collections agency in the world. According to the most recent statistics available, in 2013 the IRS spent $11.6 billion and employed just under 87,000 to collect more than $2.8 trillion in tax revenue. Of those 87,000 personnel, over 19,000 are directly involved in enforced collections against taxpayers that owe back taxes.
While the IRS is one bill collector that can have a serious impact on your life, it’s important to understand just how they work. So the first thing to realize is that the IRS is a slow moving bureaucracy. It is highly driven by forms, written procedures and is resistant to change. Their playbook is public record and they are required to follow it. While this may not bode well for you resolving your tax matters expeditiously, it does give you some comfort in that you can figure out what is coming next. Below we break the IRS collections process down into the 1040 notice sequence and the collections system.
1040 Notice Sequence
The IRS doesn’t start collections against you simply because you file a return with a balance due. The process actually begins when they issue a letter called a Statutory Notice of Deficiency or SNOD. This letter informs you of the IRS’ intent to assess a tax deficiency and informs you of your rights to dispute the proposed adjustment. From here, the notice sequence progresses like this if you fail to respond at each stage:
The CP503 typically comes about 4-5 weeks after the first notice. The remaining notices will each come around 30 days after one another so it can take about 4 months from the initial letter until it culminates with a Letter 1058. While the CP504 language sounds nasty, one may choose to ignore it. However, there are two things to note about the Letter 1058:
Does this mean that the IRS will levy you? Not necessarily; especially if they don’t know where your assets are. However, it would be wise to pick up the phone at this point and call the IRS as well as file Form 12153, Request for Collection Due Process Hearing (i.e. appeal).
Collections System
Now you may ask why understanding the “system” is even important to this discussion. Well, it’s because some of the notices you get aren’t being generated by humans. They are done on an automated schedule. Thus, until your case winds up with a dedicated “human” at some point (i.e. a Revenue Officer) it can be hard/frustrating trying to get the notices to stop. Thus, collections enter into the following levels of the system at varying stages:
When you are assigned to a Revenue Officer, the course of your tax case can take a sudden shift. Having an experienced, trained human being looking at your tax case, and passing judgment on you based on what’s in a file and thereby determining how they are going to handle your tax case, means a lot. Unfortunately, due to current economic times, the waiting line for assignment to an RO is many areas of the country is growing longer and longer.
Similar to above, having a trained representative on your side working the case with the IRS can mean a world of difference. If you are interested in assistance or just want to discuss your situation, we’d be happy to speak with you. Simply shoot us an email or give us a call.
Until next time…