Glossary

Letter 668D (Release of Levy)

IRS Letter 668D is sent to notify taxpayers that the IRS has released a levy that was placed on their property or assets due to unpaid taxes. This letter is typically sent after the taxpayer has either paid the tax debt in full, entered into an Installment Agreement, or resolved the debt through other means, such as an Offer in Compromise.

Key points about Letter 668D:

The letter confirms that the taxpayer no longer needs to comply with the levy’s terms.
It provides instructions on how to ensure that future tax payments and filings are made on time to avoid further levies.
The taxpayer is encouraged to maintain compliance with all IRS requirements moving forward.

Receiving Letter 668D is a positive step, as it indicates that the taxpayer’s levy has been lifted and the tax debt is considered resolved or in good standing.

Recommendation

IRS Notice CP521: Installment Agreement Reminder Notice

IRS Notice CP521 is sent to remind taxpayers of their upcoming Installment Agreement payment and the due date.

CP39 Notice

IRS CP39 notifies taxpayers that their current-year refund has been applied to a prior year’s unpaid tax debt.

Notice of Federal Tax Lien (NFTL)

The IRS files a Notice of Federal Tax Lien (NFTL) to claim legal rights over a taxpayer’s property until the unpaid tax debt is satisfied.

401(k) Contribution Limit

The 401(k) contribution limit sets the maximum amount employees can contribute to their employer-sponsored retirement plan each year, offering significant tax benefits.

CP504B Notice: Intent to Levy on State Tax Refund

IRS CP504B Notice warns taxpayers of a pending levy on their state tax refund to satisfy unpaid federal tax debt, providing last-minute options to prevent the levy.

Tax Deficiency

A tax deficiency is the difference between the amount of tax the IRS determines you owe and the amount you reported on your return.

CP32 Notice: Replacement Refund Check

The IRS CP32 Notice informs taxpayers that a replacement refund check has been issued after the original check was returned.

Federal Payment Levy Program (FPLP)

The Federal Payment Levy Program (FPLP) allows the IRS to levy federal payments, such as Social Security benefits, to collect unpaid tax debt.

Filing Status

Filing status defines a taxpayer’s tax rates, standard deduction, and eligibility for credits, based on their marital and household situation.

Letter 525: General 30-Day Letter

IRS Letter 525 notifies taxpayers of proposed changes to their tax return and provides 30 days to accept the changes or file an appeal.