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IRS Suspends Several Automated Collection Notices

The IRS recently announced the suspension of more than a dozen automated collection taxpayer notices, including collection notices, balance due notices, and unfiled tax return notices.

The change comes after calls from lawmakers and tax professionals for the agency to catch up on its unprocessed backlog of several million original and amended returns filed by individuals and businesses.

“IRS employees are committed to doing everything possible with our limited resources to help people during this period,” IRS Commissioner Chuck Rettig said in a Feb. 9 statement. “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. Our efforts are not limited to suspension of these additional letters and the possibility of similar actions going forward. 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.”

These automatic notices have been temporarily halted until the backlog is worked through. The IRS will continue to assess the inventory of prior year returns to determine the appropriate timeframe for reinstating the notices.

The suspended notices include:

Individual Tax Notices

Notice/Letter NumberTitleDescription
CP80Unfiled Tax ReturnThis notice is generally sent when the IRS credited payments and/or other credits to a taxpayer’s account for the tax period shown on the notice, but the IRS hasn’t received a tax return for that tax period.
CP59 and CP759 (in Spanish)Unfiled Tax Return(s) – 1st NoticeIRS sends this notice when there is no record of a prior year return being filed.
CP516 and CP616 (in Spanish)Unfiled Tax Returns – 2nd NoticeRequest for information on a delinquent return as there is no record of a return filed.
CP518 and CP618 (in Spanish)Final Notice – Return DelinquencyThis is a final reminder notice when there is no record of a prior year(s) return filed.
CP501Balance Due – 1st NoticeThis notice is a reminder that there is an outstanding balance on a taxpayer’s accounts.
CP503Balance Due – 2nd NoticeThis notice is the second reminder that a there is an outstanding balance on a taxpayer’s accounts.
CP504Final Balance Due Notice – 3rd Notice, Intent to LevyThe IRS sends this notice when a payment has not been received for an unpaid balance. This notice is a Notice of Intent to Levy (Internal Revenue Code Section 6331 (d)).
2802CWithholding Compliance letterThis letter is mailed to taxpayers who have been identified as having under-withholding of Federal tax from their wages. This letter provides instructions to the taxpayer on how to properly correct their tax withholding.

Business Tax Notices

Notice/Letter NumberTitleDescription
CP259 and CP959 (in Spanish)Return DelinquencyIRS sends this notice when there is no record of a prior year return being filed.
CP518 and CP618 (in Spanish)Final Notice – Return DelinquencyThis is a final reminder notice that we still have no record of a prior year tax return(s).

Some taxpayers and tax professionals may still receive these notices over the next few weeks, but generally there is no need to call or respond to the notices as the IRS continues to process prior year tax returns as quickly as possible.

However, if a taxpayer or tax professional believes a notice is accurate, then the IRS states that they should “act to rectify the situation for the well-being of the taxpayer.”

For example, the IRS cautions people with due balances that interest and penalties will continue to accrue. In addition, IRS employees may — in select circumstances — issue notices to certain taxpayers to resolve specific compliance issues.

The IRS said it does not have the authority to stop all notices, as many are legally required to be issued within a certain timeframe, but the agency will continue to assess other changes and system modifications to assist taxpayers on a variety of issues.

The IRS is still encouraging taxpayers who have filing requirements and haven’t yet filed their previous returns or paid the taxes due to take action promptly as the interest and penalties will continue to accrue.

If you have any questions about the information above, please contact your E. Cohen advisor.