What Is IRS Letter 725-B?
Individuals with substantial tax debt or unresolved IRS issues may receive Letter 725-B in the mail to notify them that a meeting with an IRS revenue officer has been scheduled.
If there is no progress made during this in-person meeting to resolve the issue, a revenue officer can request collections such as wage garnishment, a bank account levy, or seizure of property like a car or house.
Why Did the IRS Assign a Revenue Officer to My Case?
Some of the most common reasons the IRS assigns a revenue officer are unpaid taxes, delinquent tax returns that have not been filed, missing employment tax deposits, and criminal investigations.
The IRS will now mail 725-B when your case is assigned to a revenue officer and a meeting is scheduled. However, the IRS does not send letters in some rare situations.
Unannounced visits by IRS officers happen when they are serving subpoenas, planning to seize assets, or engaging in undercover enforcement activities.
Before an individual allows a revenue officer to enter a home or business, they have the right to request the officer’s IRS credentials and HSPD-12 card. HSPD-12 cards are standard forms of ID for all federal employees.
What Happens When I Meet With an IRS Revenue Officer?
When you meet with your revenue officer, they will review your tax returns (usually from the last three years), income (W-2s, 1099s, Social Security payments, investments, etc.), bank statements, and, if applicable, evidence that you are experiencing financial hardship.
Your revenue officer will explain tax payment and relief options for what you owe the IRS.
If you do not agree to an IRS payment plan at your meeting, the officer will likely tell you that the IRS can take money from your paycheck and/or bank accounts to pay off your tax debt.
Can I Change the Date, Time, or Location of a 725-B Appointment?
Yes, but you must call your assigned revenue officer as soon as you receive the letter. Your officer’s phone number will be included in your 725-B.
Note that they will want to know why you need to change the date, time, and/or location and some options that work for you. You may even be able to request to meet at your home or business.
Although revenue officers try to accommodate reasonable requests to reschedule or meet at a different location, you should not expect the officer to agree to a change that will delay the meeting for an extended time.
What Happens If I Don’t Respond to Letter 725-B or Miss a Scheduled 725-B Meeting with an IRS Officer?
When this happens, the IRS can file a substitute return for you, terminate an existing payment plan/installment agreement, file a tax lien, garnish wages, levy bank accounts, seize property, and more.
In addition, unpaid taxes continue to accrue penalties and interest, increasing the amount you owe. In some cases, once the IRS begins specific collections, your payment plan and tax relief options may be more limited.
Can I Still Qualify for an Offer in Compromise or Other Tax Debt Relief If I’m Assigned to a Revenue Officer?
Yes, you can still apply for an IRS installment agreement, Offer in Compromise, or other tax relief even when you have been assigned a revenue officer. Your officer will review what you qualify for when you meet.
If you need the IRS to agree to settle your tax debt for less than what you owe, you may be asked to submit additional forms for your revenue officer to have a more complete view of your finances and hardship. These forms include 433-A (Collection Information Statement) and 656 (Offer in Compromise).
If you have tax debt or ongoing tax issues and receive Letter 725-B from the IRS, Wiztax can help you prepare to meet with your revenue officer and make the best case for tax relief and a favorable payment plan to resolve your tax issue.
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