Letter 725-B: You Must Schedule an In-Person Meeting With a Revenue Officer
IRS Employees Don't Make Unannounced Visits to People's Homes or Businesses. They Send This Notice If They Want to Meet.
If you receive letter 725-B, a revenue officer wants to meet with you in person. The IRS started sending out this notice in July 2023. The agency also stopped unannounced IRS officer visits at the same time.
This guide explains what this letter means and how to prepare for your meeting. Then, it outlines why the IRS decided to stop making surprise house calls. To get help now, use TaxCure's search feature to find experienced tax professionals in your area.
What Is IRS Notice 725-B?
IRS notice 725-B is an appointment letter. If a revenue officer wants to meet with you, they will send you this letter. It will include instructions on how to schedule a follow-up meeting.
How to Tell if Letter 725-B Is Real?
Sometimes scammers send fake IRS letters to trick people into sharing information or making payments. If you're in doubt about the letter, contact the IRS directly to verify that they sent the letter.
What to Do if You Receive IRS Letter 725-B
Review the letter carefully and note the deadline by which you need to reply. If you feel comfortable meeting with the revenue officer on your own, contact them and schedule a meeting. Alternatively, reach out to a tax professional and have them come to the meeting with you.
Typically, the officer will give you the option to meet at their office or on your turf. Ideally, you should always try to meet at their office. This is better than having the revenue officer in your home or office where they may look at your stuff and start to make assumptions about your ability to pay. That said, the IRS has the right to demand to come into your home or office in certain cases, but it must be scheduled. They can't show up unannounced.
If you have hired a tax professional, you can request to meet at their office. When you sign a power of attorney form for a tax pro, they can send a request to the revenue officer to meet in their office. That can be more comfortable than going into an IRS office, and it also gives you privacy.
Should You Bring a Tax Pro to Your IRS Meeting?
To be on the safe side, you should consider bringing a tax professional to the meeting. A CPA, enrolled agent (EA), or tax attorney can represent you in front of the IRS. They will ensure that you understand everything the revenue officer asks. They will help you answer questions. They will also make sure the revenue officer respects your rights and follows the correct protocols.
A tax professional can also be critical when you're dealing with subjective parts of the tax law. For instance, say that you're talking with the revenue officer about an offer in compromise. They will expect you to devote almost all of the equity in your assets to your offer, but a tax pro may be able to convince them not to include certain assets because you need them for health, safety, or work.
What to Bring When You Meet With a Revenue Officer
The revenue officer should tell you exactly what you need to bring to the meeting. Their requests may include income documents, proof of expenses, payment plan proposals, collection information statements, lists of assets, or similar types of information. Carefully review what you need to bring, and then make sure that you have everything.
Come to your meeting prepared. This will help the process go smoothly, but it will also put you on the revenue officer's good side. Keep in mind that they want to get the issue resolved quickly. If they have to schedule multiple meetings because you were not prepared, they may become upset and less willing to work with you.
Although IRS employees have to follow strict collection protocols set by the agency, they are humans. And like any other human, their moods can affect the outcome of the situation.
What Is the Purpose of Meeting With an IRS Revenue Officer?
During the meeting, the revenue officer will talk with you about your unfiled tax returns or unpaid taxes. When a revenue officer is assigned to your case, their job is to get you to pay your tax bill, and they will help you find a way to pay. For example, they may talk with you about your income and assets, and then they may suggest that you set up payments or sell assets to pay the balance in full.
However, it's critical to keep in mind that the revenue officer is not necessarily going to find you the most comfortable way to resolve the tax debt. Remember, they work for the IRS. Their goal is to recoup funds for the IRS.
If you want the best result for your unique situation, you should hire a tax professional. Then, you have an experienced pro who can stand up for you and make sure that you get the best result possible. Tax professionals know what IRS employees want to hear, they understand the tax relief options, and they're skilled at negotiating favorable outcomes for their clients.
What if You Receive 725-B and You Can't Afford to Pay
Your meeting with the IRS officer will give you a chance to talk about payment options. Before the meeting, consider how you want to pay your taxes, and then, have a proposal ready. Keep in mind, however, that the revenue officer doesn't have to accept your proposal.
For example, if they see that you have assets that you could liquidate, they may require you to do that rather than accepting a payment plan or letting you settle for less than you owe. That's why it's critical to work with a tax professional. They can help you deal with the revenue officer and get the best results possible for your case.
Here are the main options to consider if you can't afford to pay in full:
- Installment agreement — Make monthly payments on your tax debt. Once a revenue officer has been assigned to your case, you will likely need to provide detailed information about your finances to get a payment plan.
In contrast, if you set up a payment plan before an officer is assigned to your case, you can often get a payment plan on up to $250,000 of tax debt without making a financial disclosure.
- Partial payment installment agreement — Make monthly payments until the collection statute expires. Then, the IRS writes off the remaining debt. This plan can help you save money, but if your finances improve before the end of the collection period, the IRS can demand full payment.
- Offer in compromise — Make an offer to settle your tax debt for less than you owe. You must pay the settlement within five months or in monthly installments for 24 months. If you choose the latter option, your total payment amount will be higher.
- Hardship status — Get the IRS to mark your account as currently not-collectible. The IRS will not try to collect the debt, but they will review your situation periodically to see if your finances improve. Then, they will demand payment.
Depending on the situation, there are also other options for dealing with unpaid taxes, including reducing the balance through penalty abatement, requesting an offer in compromise based on doubt as to liability, or applying for innocent spouse relief. Note that for all IRS tax relief options, there are different rules for individuals and businesses.
What if You Don't Want to Meet With a Revenue Officer
Unfortunately, you may not be able to get out of the meeting. Of course, you can always pay in full or file your delinquent returns, and then, there won't be anything to meet about. But other than that, you may not be able to avoid this obligation.
To learn about your rights in this situation, contact a tax professional. Otherwise, call the revenue officer and ask if there are alternatives to face-to-face meetings. Depending on your reason for not wanting to meet, they may be willing to schedule an alternative, such as a phone meeting or a video call.
What if You Ignore Letter 725-B
Do not ignore this letter. If you ignore this letter, the revenue officer will assume that you don't want to pay your tax debt, and they will pursue collection actions against you. Revenue officers have the right to issue tax liens, initiate wage garnishments, or levy your real or personal property.
In many cases, by the time you receive this type of letter, a federal tax lien will already be in place, and it will stay attached to your current and future assets until you pay the tax bill in full. However, wage garnishments and levies are advanced collection actions, and once they've been initiated by a revenue officer, they can be difficult to remove. Additionally, these types of collection actions come with various fees and costs (such as the cost of auctioning off your assets), which increase the total amount you're forced to pay.
Other Notices Sent by Revenue Officers
This is not the only notice sent by revenue officers. Typically, they send Form 9297 when they are assigned to your account. They use this form to gather information about your finances, and in some cases, they may ask you questions from this form over the phone. They will also send you notices about how much you owe and collection actions that are pending on your account.
Get Help Dealing With Revenue Officers and 725-B
If you've received a request to meet with a revenue officer, you don't have to deal with it on your own. Instead, use TaxCure to search for a local professional who can help you navigate this situation.