Glossary

Letter 3127C

IRS Letter 3127C is sent to taxpayers to confirm that the IRS has made changes to their existing Installment Agreement. These changes could include adjustments to the monthly payment amount, the due date, or other terms of the agreement.

Key points in Letter 3127C:

The letter provides details about the specific changes made to the payment plan, including any updated payment terms.
It explains the new monthly payment amount and the due dates for each payment.
The taxpayer must continue making payments according to the updated schedule to avoid defaulting on the agreement.

Receiving this letter helps taxpayers stay informed about any modifications to their payment plan, ensuring that they remain compliant with IRS requirements.

Recommendation

Self-Employment Tax Deduction

The self-employment tax deduction allows self-employed taxpayers to deduct the employer-equivalent portion of their self-employment taxes, reducing their taxable income.

CP27 Notice: Earned Income Credit Eligibility

The IRS CP27 Notice notifies taxpayers of potential eligibility for the Earned Income Credit and provides instructions on how to claim it.

Financial Hardship

Financial hardship occurs when a taxpayer cannot pay their tax debt without affecting basic living expenses, qualifying them for relief options like CNC status.

IRS Form 8379: Injured Spouse Allocation

IRS Form 8379 is used by an injured spouse to reclaim their share of a joint tax refund if it was applied to their spouse’s tax debt.

CP508C Notice

IRS CP508C notifies taxpayers that their passport eligibility is in jeopardy due to seriously delinquent tax debt and provides steps to resolve the issue.

CP21C Notice: Changes to Your Tax Return – Balance Due

IRS CP21C Notice notifies taxpayers that changes to their tax return have resulted in an additional balance owed and explains how to pay the new balance.

CP259 Notice: Return Delinquency Notice

The IRS CP259 Notice warns taxpayers that they have not filed a required tax return and outlines steps to file and avoid penalties or further enforcement actions.

Letter 3217C: Approval of Partial Payment Installment Agreement

IRS Letter 3217C notifies taxpayers that their request for a partial payment installment agreement has been approved, outlining the terms of the agreement.

CP75 Notice: Earned Income Credit Verification Needed

The IRS CP75 Notice informs taxpayers that additional documentation is required to verify their eligibility for the Earned Income Credit (EIC).

Currently Not Collectible (CNC)

Currently Not Collectible (CNC) status temporarily suspends IRS collection actions for taxpayers who cannot afford to pay their tax debt.