IRS Efforts to Streamline System Includes Suspending Automated Notices

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In the latest push to try and organize a better 2022 tax season, the Internal Revenue Service is suspending more than a dozen automated letters it sends out to taxpayers. These include collection notices, balance due notices and unfiled tax return notices. The actions seem to be a direct result of pressure from lawmakers and tax professionals to catch up on its backlog of unprocessed returns. These automatic notices have been temporarily stopped until the backlog is worked through.

The IRS has been facing criticism from a coalition of tax professional groups, as well as members of Congress who have been hearing from their constituents. Concerns include the backlog of millions of unprocessed tax returns from last year, as well as the flood of automated notices that have been generated by the IRS’s computer systems with little opportunity of contacting someone at the IRS for help with responding.

The IRS announced the suspension of more than a dozen other letters, including the mailing of automated collection notices that are typically sent when a taxpayer owes additional tax, and the IRS has no record of a taxpayer filing a tax return.

The IRS cautioned that some taxpayers and tax pros may still receive the notices during the next few weeks. But generally, there’s no need to call or respond to the notice as the IRS will continue to process prior year tax returns as quickly as possible.

The suspended notices include:

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.
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).

Contact the Tax professionals at Anthony J. Madonia & Associates, Ltd. with your concerns. AJM&A Ltd. is dedicated to all aspects of taxation and tax preparation. We understand what strategies need to be implemented to avoid unnecessary taxes. Call for a free consultation (312) 578-9300 or email info@madonia.com.