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March 14, 2022

The Suspension of Certain IRS Automatic Notices May Pose A Trap for The Unwary Taxpayer

The IRS entered this filing season with a historic backlog of several million original and amended returns filed by individuals and businesses that have not been processed due to challenges of the pandemic. On February 9, 2022, the IRS announced (IRS News Release IR-2022-31) that it would temporarily suspend mailing certain automatic notices (listed below) sent out when a taxpayer owes or has not filed a tax return until the IRS has worked through its backlog. This change, which appears to be the result of the IRS bowing to pressure from lawmakers that had requested a change for this tax season, may pose a trap for the unwary.

While those who are compliant will not be receiving a flurry of notices for returns that they have previously filed or balances that they have paid, others may not receive notices that penalties and interest are accruing or that filings have been missed and will need to account for these items separately.

Any automatic notices not specified and all non-automatic notices – such as those for identified compliance issues – will still be sent to taxpayers, possibly resulting in further confusion for certain taxpayers due to incomplete information.

How MGO Can Help

With these suspended notices comes the possibility of missed payments and filings. If you have questions, please reach out to MGO’s Tax Controversy team for assistance. You can rely on us to handle your various controversy needs holistically at the federal, state & local, and international levels.

Suspended Notices for Individuals:

  • CP80: Generally, this notice is sent when the IRS credited payments and/or other credits to a taxpayer’s account for the tax period shown on the notice but still hasn’t received a tax return for that tax period.

  • CP59/CP759: The IRS sends this notice when there is no record of a prior year return being filed.

  • CP516 /CP616: This is the second request for information on a delinquent return as there is no record of a return filed.

  • CP518/CP618: This is the final reminder notice when there is no record of a prior year(s) return filed.

  • CP501: This is the reminder of an outstanding balance due.

  • CP503: This is the second reminder of an outstanding balance.

  • CP504: This is the third notice indicating the IRS’s intent to levy your income and bank accounts and seize property if you don’t immediately pay the amount due.

  • 2802C: This notice is sent when the IRS has credited payments to a taxpayer’s account but hasn’t received a return for that tax period.

Suspended Notices for Businesses:

  • CP259/CP959 : The IRS sends this notice when there is no record of a prior year return being filed.

  • CP518/CP618 : This is the final reminder notice that there is no record of a prior year tax return(s).

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