IRS Notices & Penalty Relief
A letter from the IRS is not the end of the story. An Enrolled Agent can answer it for you, ask for penalties to be removed, and put a plan in place.
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Led by Latifeh Hammad, EA, Enrolled Agent
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The Answer, First
Most IRS notices can be resolved, and many penalties can be reduced or removed. What decides the outcome is responding correctly and before the deadline, not how large the number on the letter is.
The expensive mistakes are ignoring the letter, paying a proposed amount that was wrong, or agreeing to a payment plan you cannot keep. Each one is avoidable if a qualified representative reads the notice first.
Who Handles Your Case
Latifeh Hammad is an IRS Enrolled Agent. Enrolled Agents are licensed by the U.S. Department of the Treasury and hold unlimited rights to represent taxpayers before the IRS, the same representation rights as a CPA or tax attorney. Tax resolution is the core of her work: notices, penalties, balances due and payment plans, for businesses and individuals.
She works alongside our CPA team, so if a notice traces back to how a return was prepared or how the books were kept, the fix covers the cause and not only the letter.
Common Notices And What They Mean
The notice number is printed in the top or bottom right corner of the letter. These are the ones we see most.
CP2000
The IRS believes income on your return does not match what was reported to it. This is a proposal, not a bill. It can be agreed, partly agreed or disputed, usually within 30 days.
CP14
A balance is due. Penalties and interest keep growing until it is paid or a payment plan is in place.
CP501, CP503 and CP504
Escalating reminders on an unpaid balance. A CP504 is a notice of intent to levy, which means the IRS can begin collection if nothing is done.
LT11 or Letter 1058
Final notice of intent to levy. It carries a 30-day window to request a Collection Due Process hearing, a right you lose if the deadline passes.
How Penalty Relief Works
The failure-to-file penalty is 5 percent of the unpaid tax for each month a return is late, up to 25 percent. The failure-to-pay penalty is 0.5 percent a month, also up to 25 percent. Together they grow quickly, which is why relief is worth asking for.
First-Time Abatement is an administrative waiver for taxpayers with no significant penalties in the prior three years who have filed the required returns and paid, or arranged to pay, the tax due. Reasonable cause relief covers situations such as serious illness, a death in the family, a disaster, or records you could not obtain. Both have to be requested. The IRS rarely applies them on its own.
What We Do For You
Notice response
We read the notice against your return and IRS transcripts, then agree, correct or dispute it in writing before the deadline.
Penalty relief
We request First-Time Abatement where you qualify, and build a reasonable cause case where something outside your control caused the problem.
Payment plans
We set up an installment agreement you can actually keep, so the balance stops escalating toward liens and levies.
Representation
Under a power of attorney, Latifeh deals with the IRS for you. You stop taking the calls and stop opening the letters alone.
What we do not do is promise to settle your balance for a fraction of what you owe. That outcome exists only in narrow cases the IRS defines, and firms that lead with it are selling a fee, not a result. We will tell you plainly which options you qualify for.
Frequently Asked Questions
- I got a letter from the IRS. What should I do first?
- Read the notice number in the top or bottom right corner and the response date. Do not ignore it and do not pay or sign anything you do not understand. Send us a copy before the deadline and we will tell you what it means and what the right response is.
- What is an Enrolled Agent?
- An Enrolled Agent is a tax professional licensed by the U.S. Department of the Treasury with unlimited rights to represent taxpayers before the IRS. Enrolled Agents can handle notices, collections, appeals and audits on your behalf, the same representation rights as a CPA or tax attorney.
- Can IRS penalties be removed?
- Often, yes. The IRS offers First-Time Abatement for taxpayers with a clean three-year history, and reasonable cause relief where something outside your control caused the problem. Interest generally cannot be waived on its own, but it is reduced when the penalty it was charged on is removed.
- What if I cannot pay what I owe in full?
- The IRS offers short-term extensions and longer monthly installment agreements. Setting one up stops the balance from escalating into enforced collection. We work out a payment you can actually keep, because a defaulted plan is harder to fix than no plan.
- Do I have to talk to the IRS myself?
- No. With a signed power of attorney (Form 2848), your Enrolled Agent speaks to the IRS for you, receives copies of your notices and handles the calls and correspondence.
- Do you promise to settle my debt for less?
- No, and you should be wary of anyone who does. Settling for less than you owe is possible only in narrow cases the IRS defines. We tell you honestly which options you qualify for after reviewing your account.
Send Us Your Notice Before You Respond
Tell us what the letter says and when it is due. Latifeh will review it and tell you what it means, what your options are, and what it will cost to resolve.
This page is general information about federal tax procedures, not tax advice for any specific taxpayer, and no client relationship is created by reading it. Outcomes depend on facts we have not reviewed, and IRS rules, rates and thresholds change. RCN CPAs & Business Advisors, Kennesaw, Georgia.