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IRS Stops Sending Warning Letters Due to Processing Backlog

IRS Stops Sending Warning Letters Due to Processing Backlog
Ines Zemelman, EA
24 February 2022

Overwhelmed with millions of unprocessed tax returns, the IRS has announced that it will stop sending more than a dozen types of automated notices to taxpayers, including warning letters for outstanding tax debt and unfiled tax returns. 

These automated notices will be suspended until the IRS works through its backlog. It's important to note that interest and penalties on unpaid taxes will continue to accrue for those who owe back taxes, even with the suspension of collection notices.

Why did the IRS stop sending warning letters?

Staffing issues and the COVID-19 pandemic left the IRS struggling to deal with "several million" unprocessed tax returns and payments. A report from the Taxpayer Advocate Service revealed that nearly 24 million returns sit unprocessed, with many refunds delayed for a year or more.

Due to the backlog, the IRS sent out automated notices that had inaccurate information. Some taxpayers reported receiving warning letters for delinquent tax returns that were already filed.

The agency finally stopped sending out collection notices to prevent any confusion arising from inaccurate information.

Which IRS notices have been suspended?

The IRS is suspending the mailing of a dozen notices until it can work through its backlog of unprocessed tax returns.

Suspended individual taxpayer notices:

  • CP80: Unfiled tax return
  • CP59/CP759: Unfiled tax return, 1st notice
  • CP516/CP616: Unfiled tax return, 2nd notice
  • CP518/CP618: Final notice, return delinquency
  • CP501: Balance due, 1st notice
  • CP503: Balance due, 2nd notice
  • CP504: Final balance due notice, 3rd notice, intent to levy
  • 2802C: Withholding compliance letter

 

Suspended business notices:

What if I receive a notice?

The IRS only stopped sending out automated notices on 9 February 2022, so it's possible that you could receive a letter that was sent before the suspension. Your response depends on the type of notice you get.

For instance, if you receive a notice about an unfiled tax return, and you've already filed yours, the letter is likely outdated and you can safely ignore it.

If you have questions about your tax situation, your best option is to talk to a tax professional. You can trust the experts at TFX to give you the advice you need. Our experienced team can help you solve your tax issues and save you thousands of dollars.

Ines Zemelman, EA
Founder of TFX