Have you recently received a notice from the IRS?

Some taxpayers recently received a variety of notices from the IRS. The IRS issued a memo last week outlining their mission-critical operations and addressed an error in sending out certain notices without proper updates.

One recent notice is a balance-due letter that went out, even if the taxpayer had sent in their payments before the extended July 15 deadline. This error is due to a backlog of close to 12 million pieces of mail that remain unopened at IRS centers because of the coronavirus pandemic.

The IRS’s collection system is fully automated, and so it automatically sends out collections notices despite the mail backlog. Congress called for the notices to stop until the agency can get caught up, and the IRS agreed. The agency suspended mailing three notices — the CP501, the CP503 and the CP504 — that are sent to taxpayers who have a balance due.

For any checks mailed to the IRS that remain unopened, the IRS will post them on the date received and not the date they processed them. So, make sure you don't cancel your check so that the funds are available when the IRS ultimately processes your payment. That way, you'll avoid any penalties.

Also, because of high call volumes, the IRS recommended that taxpayers wait to contact them about any unprocessed paper payments still pending.

We recommend never ignoring a notice from the IRS and to contact your tax professional if you have any notification from the tax agency, especially if you believe it's inaccurate. If you received a balance-due notice, gather your documents, including a copy of the certified mail receipt, copy of your checkbook, and bank records showing the check has not been cashed.

Your CP Advisors are keeping up to date on the developments and are here to assist you. Contact us with any questions or concerns you may have.