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by Paul Bonner | Aug 26, 2020
The IRS announced Friday it had suspended sending certain balance-due notices to taxpayers while it continues to process its backlog of unopened mail, which may in some cases contain the sought payments. Also on Friday, the IRS said it was working to identify and correct erroneous penalties it applied to some employers who reduced their payroll tax deposits to claim COVID-19 relief-related credits.
In the first announcement, three types of taxpayer follow-up notices are suspended — CP501, CP503, and CP504 — all of which the IRS typically sends after first notifying a taxpayer via a CP14 letter of a tax account balance due and not receiving a response.
The action comes two days after U.S. Rep. Richard Neal, D-Mass., chairman of the House Ways & Means Committee, wrote IRS Commissioner Charles Rettig to request that the IRS temporarily stop sending notices to taxpayers regarding payments that taxpayers had mailed to the IRS on time but “whose correspondence and payments remain unopened” in the Service’s unopened mail, which at one point in recent months was estimated to number 12 million items.
In its announcement, the IRS acknowledged it still has a mail backlog, which accumulated during the COVID-19–related closure of most of its operations but said it was making “significant reductions” in it. The IRS said it was suspending the notices until it further reduces the backlog, “to lessen any possible confusion that might be associated with delays in processing correspondence received from taxpayers.”
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Source: Journal Of Accountancy
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