Letter 3391: Final Demand for Payment

The IRS Letter 3391 is a final demand for payment sent to taxpayers with outstanding tax debt. This letter serves as the IRS’s last warning before initiating more aggressive collection actions, such as levies or liens, to recover the unpaid balance. Letter 3391 typically follows multiple previous notices or attempts by the IRS to collect the debt and signifies that the IRS is prepared to escalate its efforts if the debt remains unpaid.

Key elements of IRS Letter 3391 include:

1. Summary of Outstanding Debt
   Letter 3391 provides a detailed breakdown of the tax debt owed, including the original tax liability, accrued penalties, and interest. This total amount is what the IRS expects the taxpayer to pay immediately to avoid further action.
2. Final Warning Before Collection Actions
   The letter serves as the IRS’s final warning to the taxpayer, making it clear that the agency is ready to move forward with enforced collection actions if the debt is not resolved. Potential actions include levying bank accounts, garnishing wages, or placing liens on property, which can have serious long-term consequences for the taxpayer.
3. Options for Payment
   Letter 3391 outlines available options to settle the debt, including:
   • Full payment: Paying the entire balance due to avoid additional penalties or interest.
   • Installment agreement: Setting up a monthly payment plan with the IRS, which allows the taxpayer to pay off the debt over time.
   • Offer in compromise: If eligible, taxpayers may be able to settle their debt for less than the full amount by applying for an offer in compromise.
4. Consequences of Non-Compliance
   If the taxpayer does not respond to Letter 3391 or fails to arrange for payment, the IRS will initiate enforced collection actions. These measures can lead to financial hardship and damage to the taxpayer’s credit score, as well as restricted access to assets or income. Addressing the letter promptly is critical to avoid these outcomes.
5. Importance to Tax Debt Resolution
   Letter 3391 underscores the urgency of resolving tax debt before the IRS enforces collection. Taxpayers can use this final opportunity to negotiate repayment options or reduce their debt through an offer in compromise. Acting quickly upon receiving this notice can prevent garnishment, liens, and other financial impacts.

Letter 3391 is one of the most serious notices the IRS issues, and it represents a taxpayer’s last chance to address tax debt voluntarily before the IRS takes direct collection action.