IRS Suspends Some Automatic Collection Notices

HI INDIA NEWS DESK
EDISON, NJ -The IRS, under pressure from lawmakers, said late Wednesday it will suspend the mailing of automatic collection notices, which are triggered when its records show a taxpayer owes tax and has not filed a tax return.

The agency has millions of unprocessed tax returns from the 2020 tax year, so many of the letters have all ready been sent, confusing taxpayers and tax preparers who know returns have indeed been filed.

The announcement comes a day after National Taxpayer Advocate Erin Collins testified to Congress, saying the the IRS will have “extraordinarily high” delays in processing returns again this year.

Collins said it’s due in part to the agency’s 2020 backlog, which includes six million individual tax returns, 2.3 million amended tax returns and another two million quarterly tax returns from employers as of late December

She also said only 11% of taxpayers looking for help from the IRS by phone in 2021 could get through to an agent.

The IRS last week said it was shifting 1,200 employees to work on the backlog in an attempt to minimize delays in processing 2021 tax returns.

“This is an all-hands-on-deck situation to help people as quickly as possible and reduce the stress on employees who have been and continue to face unprecedented levels of inventory to be worked,” IRS Commissioner Chuck Rettig said in an email to employees last week.

The IRS said it will “continue to assess the inventory of prior year returns to determine the appropriate time to resume the notices.”

Over the next several weeks, some taxpayers and tax preparers may still receive the notices, the IRS said, noting that generally, there is no need respond to the notice because the IRS is still processing the returns. But if you think a notice could be accurate, it said, taxpayers should act, it said, adding that people with a balance due could see interest and penalties continue to accrue.

In late January, a bipartisan group of more than 200 lawmakers led by Sen. Bob Menendez (D-New Jersey) asked the federal government to stop automatic collection notices until 90 days after April 18, the filing deadline for submitting 2021 tax returns.