The IRS’s automated computer system generates certain types of notices to taxpayers, based on parameters programmed in the system and information entered and which is specific to a taxpayer. For example, when a taxpayer files a tax return with a balance due, once the return is processed, the automated system automatically begins to generate collection notices. The system, however, is not set-up to account for outside events, specifically the backlogs and issues that have been caused as a result of the Covid pandemic.
In early February, the IRS announced it is suspending some types of automated notices, in response to the backlog it currently has. The suspended notices are listed on the IRS website, but are generally of two types: (1) notifications about missing tax returns or (2) collection notices, informing taxpayers of balances due.
The suspended notices simply mean the IRS system will not be sending them out until the IRS gets through some of its backlog. It does not mean taxpayers should ignore missing tax returns or balances they have outstanding with the IRS. If a taxpayer has not filed any type of tax return when it had an obligation to do so, the taxpayer should promptly resolve that by filing the return, whether an IRS notice is issued requesting one or notifying the taxpayer it is missing. A taxpayer can obtain information about missing tax returns from the IRS or with the assistance of a tax professional so that it can be resolved. Taxpayers should not wait until a notice is received about a missing tax return.
If a taxpayer has a balance due, the taxpayer is not going to receive some of the automated notices as reminders, but interest and penalties continue to accrue while the balance remains unpaid. It is not in a taxpayer’s interest to ignore outstanding balances, just because notices are not being sent. The IRS will continue to send out other types of notices not specifically included in the temporary suspension.
If you have questions, contact Anderson & Jahde for competent, professional tax help.