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IRS Will Stop Sending Stale Dated Past-Due Notices To Taxpayers | Florida

Updated: Nov 11, 2020


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Many taxpayers throughout the nation are feeling overwhelmed and not sure how to handle overdue notices sent from the Internal Revenue Service (IRS). As a result of the IRS notices sent out, taxpayers have been complaining about the receipt of notices showing a balance due with impossible deadlines. Nearly all IRS notices are sent out by the IRS' Automated Collection System (ACS). The ACS is the IRS computer. They are pre-programmed notices scheduled to be sent a various intervals.

How many notices went out? According to the Taxpayer Advocate, during the pandemic-related shutdown, the IRS generated more than 20 million notices; however, these notices were not mailed to taxpayers. So, the IRS started mailing them out.

Simultaneously, in June, the estimated backlog of unopened IRS mail stood at 11 million. That means that taxpayer checks remained un-cashed.

The IRS recently noted that "If a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog of mail the IRS is processing due to COVID-19."

The combination of unopened mail and past-due notices has heightened anxiety and tempers.

On August 19, 2020, House Ways and Means Committee Chairman Richard E. Neal (D-MA) sent a letter to the IRS demanding that the notices stop. "These notices impose unnecessary stress on taxpayers who, upon receipt, must contact the IRS for assistance," Neal wrote. "This is particularly troubling at a time when the IRS is telling taxpayers who need to call the agency 'to expect long waits due to limited staffing.' Taxpayers reaching out for assistance on the telephone must hope someone can answer their call and that all payments they have made have been opened, processed, and indicated on their account. Certainly, any additional correspondence generated by these notices can prove difficult for the IRS to handle and cause significant delays for taxpayers seeking fair resolution." The IRS has now announced that they have suspended the mailing of three notices:

a. the CP501 (typically, a balance due);

b. the CP503 (you still have an unpaid balance and the IRS hasn't heard from you); and

c. the CP504 (you still have an unpaid balance, you REALLY haven't responded, and the IRS intends to levy).

These follow-up notices are typically automatically sent to taxpayers who do not respond to an initial notice of balance due (called a CP14). These automatic follow-up notices will be temporarily stopped until the backlog of mail is reduced. When the IRS starts "getting back up to speed" IRS enforcement will go on as usual.

There is no current deadline to resume the follow-up notices. The IRS says that it will make the determination as the backlog is cleared.

As for those unopened checks? They will be posted and credited on the date the IRS received them – rather than the date the agency opened and processed them. 

That means that you should not cancel your original check. Just because it hasn't been cashed or credited doesn't mean that it has gone missing: it's likely only temporarily diverted.

And, don't spend that money. Assume that the IRS will cash your check any day now. While the IRS is providing relief from bad check penalties for dishonored checks the agency received between March 1 and July 15 due to delays in this IRS processing, interest and penalties may still apply. 

Finally, save yourself some time and energy and don't call. The IRS says it will make things right (eventually), so there's no need to call, file a second return, or cancel any outstanding checks. 

The tax professionals at Flat Fee Tax Relief feel that this may be the greatest opportunity to submit an Offer in Compromise (#IRSsettlement). Why do we believe this. Our thinking is this: there are many, many taxpayers out of work due to a virus. The government needs to get the economy back on it's feet. Our economy can't have most of it's citizens mired in tax debt. Also, the IRS is overwhelmed trying to handle the backlog.

The IRS has always had two primary goals: One is to collect money. The amount the IRS collects is "somewhat" immaterial as the IRS must "put up a score" in the collection column. The second IRS goal is to close a file. The IRS will be deluged with tax debt files due to the China virus. A tax settlement Offer in Compromise will accomplish both of these goals. If you have any questions about your next steps, reach out to an experienced tax professional. Should you receive an IRS notice this week from the IRS, be prepared to take advantage of the situation.

This article is brought to you by the tax professionals at Flat Fee Tax Relief. Our tax pros have been providing valuable IRS tax debt help at a very affordable fee for more than a decade. We are strategically located in Clearwater, Florida, and San Diego, California which allows our teams to be available both to our clients and the IRS from 8 A.M. Eastern to 6 P.M. Pacific time. This is a huge advantage when preventing an IRS levy. Call us for a free no-obligation consultation.



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