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US IRS To Pause Some Tax Enforcement Proceedings

Wednesday, February 16, 2022

The US Internal Revenue Service (IRS) has suspended the use of more than a dozen additional letters, including the mailing of automated collection notices, normally issued when a taxpayer owes additional tax and the IRS has no record of a taxpayer filing a tax return.

These suspended mailings include balance due notices and unfiled tax return notices. The pause is due to the COVID-19 pandemic. The agency entered this filing season with several million original and amended returns filed by individuals and businesses not processed. The step is to help avoid confusion for taxpayers and tax professionals, the IRS said.

"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."

"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," Rettig said.

Specifically, for individuals, the IRS has suspended issuance of the following notices:

  • CP80 – Unfiled Tax Return. This 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 Notice.
  • CP516 and CP616 (in Spanish) – Unfiled Tax Returns, 2nd Notice.
  • CP518 and CP618 (in Spanish) – Final Notice – Return Delinquency.
  • CP501 – Balance Due – 1st Notice.
  • CP503 - Balance Due – 2nd Notice.
  • CP504 - Final Balance Due Notice - 3rd Notice, Intent to Levy.
  • 2802C - Withholding Compliance letter.

For businesses, the IRS has suspended the following notices:

  • CP259 and CP959 (in Spanish) – Return Delinquency, sent when there is no record of a prior-year return being filed.
  • CP518 and CP618 (in Spanish) - Final Notice - Return Delinquency.

Some taxpayers and tax professionals may still receive these notices during the next few weeks. The IRS said: "Generally, there is no need to call or respond to the notice 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, they should act to rectify the situation for the well-being of the taxpayer. [...] people with a balance due that interest and penalties can continue to accrue. In addition, IRS employees may in select circumstances issue notices to particular taxpayers to resolve specific compliance issues."

The agency said the IRS does not have the authority to stop all notices as many are legally required to be issued within a certain timeframe. The agency said: "The IRS will continue to assess other changes and system modifications that the IRS may be able to implement to assist taxpayers on an array of issues. The IRS will continue to make information available to taxpayers throughout the filing season."

The IRS said the agency will decide in the future when to resume issuing these notices, based on the inventory of prior-year returns.