A very overdue IRS with ‘limited resources’ temporarily halts a slew of tax filing notices

The IRS says it will stop sending more than a dozen notices to taxpayers as it continues to try to reduce red tape and consternation amid the current tax season, and a backlog of unprocessed returns from last year.

Those temporarily halted letters include balance owing notices, automated collection notices and unfiled tax return notices, the IRS said Wednesday.

Earlier this month, the agency said it was suspending letters saying it had no tax filings even though the taxpayer had paid.

The IRS is working through a pile of unprocessed documents that, as of late December, included 6 million original tax returns, 2.3 million amended returns and 5 million pieces of taxpayer correspondence. So chances are the IRS already has the documents and data it is looking for with the notices.

“Some taxpayers and tax practitioners may still receive these notices in the coming weeks. Generally, there is no need to call or respond to the notice as the IRS continues to process prior years’ tax returns as quickly as possible,” the agency said.

That is unless the person receiving the notice is behind on their taxes. In this case, the IRS urges the recipient to contact the agency to resolve the situation.

Suspended Notices include letters officially titled CP59 and CP759, both of which are Submitted Non-Return Notices, and CP518 and CP618, which are Submitted Final Non-Return Notices.

Notices of suspended balance owed include letters officially titled CP501, CP503, and CP504 — the last being a final notice and alert that the IRS is considering levying the balance.

These letters can be stressful for the people who receive them after doing everything right to avoid getting on the wrong side of the taxman.

As bureaucratic as it may seem, these letters can be stressful for the people who receive them after doing everything right to avoid getting on the wrong side of the taxman. Resolving the issue can take time for someone trying to speak with someone at the IRS, especially if the person waiting has their own work to do.

“IRS employees are committed to doing everything possible with our limited resources to help people during this time,” IRS Commissioner Charles Rettig said in a statement. Rettig is reassigning 1,200 staff to help with the backlog.

Although professional tax organizations say the IRS can do even more to help taxpayers, the IRS says it may need legislative changes from Congress in some cases.
One solution would be to pay higher wages to attract more employees in a tight job market, an IRS watchdog said this week.

The agency has tried to fill positions to reduce the backlog, but many jobs for that task have pay levels below $25,000 a year, said Erin Collins, the national taxpayers’ advocate with the agency. IRS, to a congressional committee. So far, 179 of 5,000 positions have been filled, Collins said.