It is so important to pay attention to IRS notices and correspondence! They aren't always indicative of bad news. That letter could be about a refund you will receive. It could also be to notify you of a credit that you missed and might be entitled to receive. Open that mail right away. If a letter from the IRS comes to you via certified mail ignoring it does not protect you from a levy, lien or garnishment. Sometimes it may appear that IRS has forgotten all about you because weeks and perhaps even months have gone by and there appears to be no follow up. IRS has not forgotten about you.
Responding quickly to the IRS can benefit you in many ways. For one, the letter may merely be requesting that you file a return. If you ignore the request to file your tax return and do not file or respond, the IRS can and will file a tax return for you. It is the government's right to prepare a "substitute for return" based on the income that has been reported to them by third parties. If you are self employed, you won't get the benefit of expenses. If you have dependents, itemized deductions and other credits due you, they will not be included by the IRS on the return they prepare for you. Once the IRS has assessed the taxes due, interest and penalties will more then likely be applied to the assessment as well. Your IRS debt will increase over time. Collection action will begin. If you continue to ignore the IRS, you may discover that your wages have been garnished, your bank accounts levied and your property seized. Ultimately a lien wil be filed against you. You don't have to currently own property to have a lien filed. The lien will be in effect on you and any property you acquire. A lien can damage your credit rating and have an adverse effect on your ability to rent or purchase a home or car. It can affect your employment opportunities. The way to handle IRS correspondence is to respond and cooperate. Open that mail. Return that telephone call. Face the situation head on with the belief that your tax problem can be resolved in many different ways.