Bought an IRS CP-80 Unfiled Tax Return Discover? A CP501 Stability Due Discover? You may in all probability disregard … [+]
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Inner Income Service computer systems hold spitting out perplexing letters and notices to taxpayers, and right now the company introduced that it’s going to cease the machines, a minimum of briefly, in an effort to assist taxpayers and tax professionals. The 2022 tax season kicked off on January 24 for submitting 2021 tax yr returns, however tens of millions of taxpayers are nonetheless ready for the IRS to course of final yr’s returns.
Instance: You filed your 2020 tax return final April. The IRS cashed your examine. Why are you getting an alarming CP-80 Unfiled Tax Return discover that claims: “We haven’t obtained your tax return. What should you do instantly? For those who’re required to file, please file right now. For those who’ve already filed, please ship a newly-signed copy.”
Savvy tax professionals know that the IRS is woefully backlogged, and the perfect response is to attend it out. A California tax preparer who filed on paper with a examine hooked up final April emailed me that he bought a CP-80 discover final month. The IRS cashed the examine, however hasn’t gotten to his return—10 months later. His plan: “IRS thinks I’ve overpaid; I can wait 6 months to see in the event that they make amends for paper.” Within the meantime, the IRS has up to date its site, Understanding Your CP80 Discover, to inform of us who’re getting CP-80 Notices who’ve already filed their 2020 returns: “DO NOT refile.”
That’s all of the IRS wants—extra paper! As of the February 7 replace to the IRS Operations web page, the IRS has made some progress on whittling down the variety of amended tax returns for tax yr 2020 in processing (2.3 million as of January 8), however it hadn’t up to date the variety of excellent particular person returns for 2020 (6 million as of December 31). “The IRS is opening mail inside regular timeframes and all paper and digital particular person refund returns obtained prior (emphasis added) to April 2021 have been processed if the return had no errors or didn’t require additional assessment.”
That backlog is inflicting issues down the road. Therefore, the choice — after outcry from tax professionals and members of Congress — to cease sending some taxpayer notices and letters for now.
The IRS announcement notes that these automated notices have been briefly stopped till the backlog is labored via, and that the company will proceed to evaluate the stock of prior yr returns to find out the suitable time to renew the notices. Some taxpayers may nonetheless get these notices and letters within the subsequent few weeks. “Typically, there isn’t any have to name or reply.” However be careful: For those who consider a discover is correct and you’ve got a steadiness due, the IRS says that curiosity and penalties can proceed to accrue.
Right here’s the rundown of suspended notices and letters:
CP-80 Unfiled Tax Return(s) 1st Discover: This discover is usually despatched when the IRS credited funds and/or different credit to a taxpayer’s account for the tax interval proven on the discover, however the IRS hasn’t obtained a tax return for that tax interval.
CP-59 and CP 758 (Spanish model): The IRS sends this discover when there isn’t any file of a previous yr return being filed.
CP-516 and CP-616 (Spanish) Unfiled Tax Return(s) – 2nd Discover: This discover is a request for data on a delinquent return as there isn’t any file of a return filed.
CP518 and CP618 (Spanish) Last Discover -Return Delinquency: It is a remaining reminder discover that the IRS nonetheless has no file of a previous yr tax return(s)
CP-501 Stability Due — 1st Discover: This discover is a reminder that there’s an impressive steadiness on a taxpayer’s accounts.
CP-503 Stability Due — 2nd Discover: This discover is the second reminder {that a} there may be an impressive steadiness on a taxpayer’s accounts.
CP-504 Last Stability Due Discover/third Discover/Intent to Levy: The IRS sends this discover when a cost has not been obtained for an unpaid steadiness. This discover is a Discover of Intent to Levy (Inner Income Code Part 6331 (d)).
2802C Withholding Compliance Letter: This letter is mailed to taxpayers who’ve been recognized as having under-withholding of Federal tax from their wages. This letter gives directions to the taxpayer on methods to correctly appropriate their tax withholding.
Two enterprise notices are additionally being briefly paused.
CP259 and CP959 (Spanish) Return Delinquency: IRS sends this discover when there isn’t any file of a previous yr return being filed.
CP518 and CP618 (Spanish) Last Discover -Return Delinquency: It is a remaining reminder discover that the IRS nonetheless has no file of a previous yr tax return(s)
A coalition of taxpayer professionals, the Tax Professionals United for Taxpayer Reduction Coalition, together with the AICPA and H&R Block, is asking for extra. They’ve requested the IRS to pause all automated compliance actions and supply aid from underpayment and late cost penalties. Keep tuned.
Additional Studying:
IRS To Drop Facial Scan ID.me Verification For On-line Accounts
Taxpayer Reduction Nonetheless Caught In Tug Of Conflict Between Congress And The IRS
