Understanding IRS CP40: What it means and How an Enrolled Agent Can Help
Steve Perry- The IRS CP40 Notice indicates a taxpayer’s unpaid tax debt has been assigned to a private debt collection agency authorized by the IRS to handle lower-priority cases before the collection statute expires. - Private agencies cannot use IRS tools like liens, levies, or garnishments, and the notice means the IRS prioritizes other cases. - Taxpayers must deal directly with the third-party agency but should verify its legitimacy and document any payment agreements. - Options include paying the full balance, negotiating installment plans, or pursuing IRS programs like Offers in Compromise to settle for less. - Enrolled Agents (EAs), such as Steve Perry, EA, offer expert guidance by assessing financial situations, negotiating with agencies, and protecting taxpayer rights. - Ignoring a CP40 Notice risks added interest, penalties, and potential IRS legal action; prompt response reduces stress and costs. - Early engagement with tax professionals like Books, Taxes & More helps taxpayers manage the debt efficiently and find tailored resolution strategies.