IRS Halts Surprise Visits, Sends 725-B to Request In-Person Meetings
For decades, IRS revenue officers paid surprise house calls to people who had unpaid tax bills. The visits were designed to learn more about taxpayers and to convince them to pay their tax bills. Sometimes, revenue officers went to people’s businesses, but they often just showed up at the front door of their homes.
Now, this practice has been stopped. If you hear someone knocking at the door, it’s definitely not the IRS. Instead, if a revenue officer wants to meet with you, they will send a 725-B letter to request a meeting. Have you just gotten this letter? Wondering what it means and how to respond? Here’s what you need to know.
What Is an Appointment Letter?
An appointment letter is simply a letter that the IRS uses to request in-person meetings with taxpayers. Usually, the IRS sends Letter 725-B in these situations.
The letter should explain why the IRS wants to meet with you and what you need to bring to the meeting. It may also come with additional forms and a deadline for you to set up the appointment.
Why Does the IRS Want to Meet With You?
Generally, the IRS requests meetings to talk about making arrangements on your tax debts. Typically, this happens if you owe a relatively large tax debt, but it can also happen if you’re dealing with other tax issues. The IRS may request meetings with both individuals and business owners.
Where Will the Meeting Take Place?
The meeting can happen at your home, your business, the IRS’s office, or your attorney’s office. There are IRS offices in every state, but if there’s not one near where you live or work, you may prefer to request a location closer to you. If so, you can consider having the meeting at your home or office, but it’s usually better to do it at your attorney’s office. That way you don’t have to worry about the IRS looking around at your stuff and gathering information you don’t want them to have.
What to Expect During the IRS 725-B Meeting
The purpose of the meeting won’t be a surprise. The 725-B letter will outline what to expect at the meeting, and it will tell you which supporting documents you need. Often, you’ll end up talking with the revenue officer on the phone before the meeting so you can learn how to prepare.
How to Respond to a 725-B Letter
Read the letter carefully and note any deadlines. Reach out to the revenue officer well before the deadline on the letter and schedule the meeting at a time that works for both of you. If you want tax representation, contact a tax attorney before you call the IRS. Once you sign a Power of Attorney, your tax attorney can contact the IRS on your behalf and set up the meeting for you.
Do You Need an Attorney to Help With IRS Meetings?
There are a lot of tax problems that you can confidently solve on your own, but once you get to the point that the IRS wants to see you in person, you most likely need an attorney. Here are some signs that you should contact an attorney after receiving an appointment letter:
- You don’t know why the IRS wants to meet with you.
- You owe over $50,000 in tax, interest, and penalties.
- You cannot afford to pay the balance in full, and you want to request an offer in compromise.
- You are facing severe hardship due to IRS collection actions.
- You cannot afford to pay anything and want your account marked as not collectible.
- The IRS has threatened to seize your wages, bank accounts, or other assets.
- You’re worried about losing your business if the IRS takes business assets.
- You’re dealing with a Trust Fund Recovery Penalty, especially if you’re not one of the business owners and the penalty has been assessed against you.
An attorney can help you understand what’s happening, and then, they can help you decide on the best path forward. They can go to the meeting with you and ensure that the revenue officer respects your rights and understands your side of the story. Tax attorneys act in your best interest to help you get a resolution that works with your goals and budget.
Why Did the IRS Stop Making Unannounced Visits?
So, why does the IRS even use this letter? Why don’t they still make surprise house calls like they used to? Well, there are a few reasons. First, it’s generally not cost-efficient to send revenue officers to people’s houses, while in contrast mailing a letter is pretty inexpensive. Second, the IRS made this decision for the safety of taxpayers and IRS employees.
Surprise house calls were confusing for taxpayers. They also increased the risk of taxpayers falling for certain scams. In particular, scammers would come to peoples’ homes and pretend that they were from the IRS. Then, they’d scare people into giving them checks, cash, or other items.
Victims often fell for these scams because there was a possibility that the scammer was really from the IRS. Now, that the IRS doesn’t make surprise visits, taxpayers won’t get confused as often. They can now assume that if someone is at their door that it’s not really an IRS employee.
Additionally, the IRS decided that it simply wasn’t safe for employees to knock on people’s doors. Distrust of the government and of random people at the door has created a dangerous situation.
Rare Exceptions to the New Rule
However, in very rare situations, the IRS may still make unannounced visits. This includes the following:
- To serve summons or subpoenas — These legal documents often need to be handed to someone in person.
- To deal with jeopardy tax levies — A jeopardy levy is when the IRS must seize someone’s property quickly (without the usual 30-day warning) because they’re worried that the person is going to hide the property or remove it from the country.
These two scenarios are relatively rare, and they should equate to just a few hundred house calls per year. In the past, the IRS was knocking on thousands of doors every year.
Notes About Working With Revenue Officers
A revenue officer is an IRS employee who focuses on collecting unpaid taxes. When you file a tax return and don’t pay, your bill goes into the IRS’s automated collection system (ACS). The ACS sends out collection notices, and it can also generate federal tax liens and take other collection actions.
If your account is in the ACS and you call the IRS, your call will go to a big call center staffed by lots of different employees. In most cases, you will talk to someone who has never seen your file before they pull it up on the computer when you call.
If you don’t pay your bill for a substantial amount of time, if you owe a lot, or if you have a history of noncompliance, the IRS may take your file out of the ACS and assign it to a revenue officer. The revenue officer will make it their professional mission to collect your unpaid taxes.
To do that, they usually start by contacting you to learn more about your finances. Often, this involves sending a meeting request with letter 725-B. Sometimes, it starts with the revenue officer sending you a Form 9297 requesting details about your finances. In a lot of cases, you will get both the 725-B and the 9297 at the same time.
What If You Cannot Afford to Pay
If you cannot afford to pay, meeting with a revenue officer can sound incredibly scary. But it’s usually not as bad as it seems. The IRS has many options for people who cannot afford to pay their taxes in full including:
- Payment plans: Make monthly payments on your tax debt until you pay off the liability in full or reach the collection statute expiration date.
- Offers in compromise: Pay a lump sum settlement in exchange for the IRS writing off the rest of the debt, reserved for people who cannot afford to pay in full even with selling their assets or considering two to five years of disposable income.
- Innocent spouse relief: Get relief from tax debts incurred by your spouse without your knowledge, that you had no reason to know about.
- Currently not collectible: Prove that you cannot afford to pay and have the IRS temporarily suspend collection actions until your finances improve.
There is also penalty abatement which can help to lower your overall debt level if you qualify. Your tax attorney can also help you uncover other options.
Contact Us Today
Ready for representation? Want your meeting to go as smoothly as possible? Tired of dealing with the IRS on your own? Then, it’s time to call Damien’s Law. To get help now, contact us today.