The IRS announced on its website that it has suspended the mailing of automated collection notices, including balance due notices and unfiled tax return notices normally issued when a taxpayer owes additional tax, and the IRS has no record of a taxpayer filing a tax return.
With several million original and amended 2020 returns filed by individuals and businesses that have not been processed due to pandemic-related challenges, the IRS hopes to avoid confusion for taxpayers and tax professionals this tax season.
The American Institute of Certified Public Accountants, along with a large and diverse industry coalition, has been pushing Congress and the IRS to act. The suspension of automated compliance notices was one of four actions suggested by the AICPA and coalition in a Jan. 14 letter submitted to the IRS and Treasury Department.
“IRS employees are committed to doing everything possible with our limited resources to help people during this period,” said IRS Commissioner Chuck Rettig. “We are working hard, long hours pushing creative paths forward in an effort to be part of the solution, rather than the problem. Our employees continue to expend every effort to balance a confluence of multiple, unprecedented demands − including successfully starting the filing season, working our inventory of unprocessed tax returns as well as looking for additional ways to minimize burden for taxpayers, tax professionals, and businesses.”
Rettig noted the efforts of the IRS are not limited to suspension of these additional letters.
“We have redeployed and reallocated resources throughout the IRS and have implemented innovative strategies in an ongoing effort to provide a meaningful reduction in our inventories,” he added.
According to the IRS, the suspension of automatic notices is temporarily stopped until the backlog is worked through. The IRS will continue to assess the inventory of prior year returns to determine the appropriate time to resume the notices.
Some taxpayers and tax professionals may still receive these notices during the next few weeks. If you receive one of these notices, please be aware there is no need to call or respond to the notice.
However, in select circumstances IRS employees may issue notices to certain taxpayers to resolve specific compliance issues.
Also, if a taxpayer or tax professional believes a notice is not accurate, they should act to rectify the situation for the well-being of the taxpayer. For example, the IRS cautions people with a balance due that interest and penalties can continue to accrue.
The IRS also encourages those who have a filing requirement and have yet to file a prior year tax return or to pay any tax due, to promptly do so as interest and penalties will continue to accrue.
The IRS does not have the authority to stop all notices as many are legally required to be issued within a certain timeframe.
The suspended notices include:
Individual Taxpayer Notices
- CP80 - Unfiled Tax Return: Generally sent when the IRS credited payments or other credits to a taxpayer’s account for the tax period shown on the notice, but the IRS has not received a tax return for that tax period.
- CP59 and CP759 - Unfiled Tax Return(s) - First Notice: The IRS sends this notice when there is no record of a prior year return being filed.
- CP516 and CP616 (Spanish) - Unfiled Tax Returns - Second Notice: Request for information on a delinquent return as there is no record of a return filed.
- CP518 and CP618 (Spanish) - Final Notice - Return Delinquency: This is a final reminder notice when there is no record of a prior year(s) return filed.
- CP501 - Balance Due - First Notice: A reminder that there is an outstanding balance on a taxpayer’s account.
- CP503 - Balance Due - Second Notice: The second reminder that there is an outstanding balance on a taxpayer’s account.
- CP504 - Final Balance Due Notice - Third Notice, Intent to Levy: The IRS sends this notice when a payment has not been received for an unpaid balance. This is a Notice of Intent to Levy.
- 2802C - Withholding Compliance Letter: This letter is mailed to taxpayers who have been identified as having under-withholding of Federal tax from their wages and provides instructions on how to properly correct their tax withholding.
- CP259 and CP959 (Spanish) - Return Delinquency: IRS sends this notice when there is no record of a prior tax return being filed.
- CP518 and CP618 (Spanish) - Final Notice- Return Delinquency: This is a final reminder notice that the IRS still has no record of a prior tax return(s).
Please Contact your Zinner & Co. Tax Team representative if you received a notice pertaining to your 2020 taxes and believe it is inaccurate, or if you feel it was sent to resolve specific compliance issues.