On February 9, 2022 the IRS announced additional relief for taxpayers suspending the mailing of certain enforcement letters.
IRS Coronavirus Tax Relief
The IRS has established a special section focused on steps to help taxpayers, businesses and others affected by the coronavirus and as information becomes available, the IRS will be updating this special page on its website.
The executive branch of the Federal government declared the coronavirus pandemic a national emergency. Therefore, under Sec. 7508A, the declaration of an emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 100-707, the IRS is allowed to delay certain tax filing and payment deadlines. While the IRS has not delayed the filing deadlines for 2021 tax returns, as part of ongoing efforts to provide additional help for people during this period the IRS is suspending 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.
Suspended IRS Notices
The IRS entered this filing season with several million original and amended returns filed by individuals and businesses that have not been processed due to challenges of the COVID pandemic. With the IRS facing a huge backlog, it had to take this step to help avoid confusion for taxpayers and tax professionals.
The suspended notices include:
|Individual Taxpayer 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 CP 759 (Spanish)||Unfiled Tax Return(s) – 1st Notice||IRS sends this notice when there is no record of a prior year return being filed.|
|CP516 and CP616 (Spanish)||Unfiled Tax Returns – 2nd Notice||Request for information on a delinquent return as there is no record of a return filed.|
|CP518 and CP618 (Spanish)||Final Notice – Return Delinquency||This is a final reminder notice when there is no record of a prior year(s) return filed.|
|CP501||Balance Due – 1st Notice||This notice is a reminder that there is an outstanding balance on a taxpayer’s accounts.|
|CP503||Balance Due – 2nd Notice||This notice is the second reminder that a there is an outstanding balance on a taxpayer’s accounts.|
|CP504||Final Balance Due Notice – 3rd Notice, Intent to Levy||The 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)).|
|2802C||Withholding Compliance letter||This 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.|
|CP259 and CP959 (Spanish)||Return Delinquency||IRS sends this notice when there is no record of a prior year return being filed.|
|CP518 and CP618 (Spanish)||Final Notice – Return Delinquency||This is a final reminder notice that we still have no record of a prior year tax return(s).|
These automatic notices have been temporarily stopped until the backlog is worked through. The IRS says it will continue to assess the inventory of prior year returns to determine the appropriate time to resume the notices.
While the suspension of these notices started February 9th, some taxpayers may still receive these notices during the next few weeks as they were in the works of being sent or generated prior to today. Also, keep in mind that this suspension does not cover all IRS notices as many are legally required to be issued within a certain timeframe.
An Opportunity For Taxpayers Who Owe The IRS
Do not think that if you owe the IRS your tax problem will disappear because of the measures being considered by the government. Instead you should be utilizing this valuable time to get yourself prepared so that when activity in this nation regains momentum, you are ready to make the best offer or proposal to take control of your outstanding tax debts.
As a prerequisite to any proposal to the IRS, you must be in current compliance. That means if you have any outstanding income tax returns, they must be completed and submitted to IRS.
Also, if you are required to make estimated tax payments, you must be current in making those payments. Fortunately, as we are now in 2022, taxpayers who expect to owe for 2021 should have their 2021 income tax returns done now so that the 2021 liability can be rolled over into any proposal and the requirement to make estimated tax payments will now start for 2021.
Remember that COVID does not alter the tax laws, so all taxpayers should continue to meet their tax obligations as normal. Individuals and businesses should keep filing their tax returns and making payments and deposits with the IRS, as they are required to do.
Also, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations. In instances where statute expirations might be jeopardized during this period and a taxpayer is not agreeing to extend such, the IRS will issue Notices of Deficiency and pursue other similar actions to protect the interests of the government in preserving such statute.
The take away from this – use the Federal government’s downtime to your advantage to prepare for the future.
What Should You Do?
You know that at the Law Offices Of Jeffrey B. Kahn, P.C. we are always thinking of ways that our clients can save on taxes. If you are selected for an audit, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), Los Angeles (including Long Beach and Ontario) and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income. Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you. And if you are involved in cryptocurrency, check out what a bitcoin tax attorney can do for you.