What This Letter Means
Letter 549-C, Balance Due on Account is Paid, confirms that the balance for the tax period shown is paid. The IRS sends it when an account is fully paid, for example after it corrects how a payment was recorded.
The Expired Collection Period Version
The IRS also uses this letter when a payment lands on a tax period whose collection period has already expired. Once that period ends, you have no obligation to pay the rest of that balance. A payment received after that point is treated as an overpayment.
In that situation the letter may:
- Tell you the collection period expired and you have no obligation to make more payments for that period.
- Tell you the IRS is refunding the payment.
- Ask where you want the payment applied: to that period, to another tax debt, or refunded to you.
- Tell you that a payment under an installment agreement was moved to another balance you still owe, and that you should use your current account information for future payments.
If the IRS asks where to apply a payment and you don't answer, it refunds the payment.
What to Do
- Keep this letter. It is your proof the period is paid.
- If the letter asks a question, answer it by the date given.
- If you have automatic payments set up, make sure they stop or are going to the right balance.
- Check whether you owe for any other tax periods. This letter covers only the period it names.
- If a federal tax lien was filed, the IRS generally issues a release within 30 days after the debt is paid in full. If it doesn't, follow up.
Deadlines
None, unless the letter asks you for information.
If you're not sure what you still owe the IRS or a lien wasn't released after you paid, call us at (813) 229-7100.