IRS suspends some automated notices due to backlog
IRS’ backlog of paper returns to be processed has increased since the COVID-19 pandemic began. Meanwhile, taxpayers have continued to receive automated notices, sometimes for unclear reasons.
Now, IRS says it has temporarily stopped issuing some notices. For example, the Service recently suspended these business notices:
- CP259, Return Delinquency (and CP959 in Spanish), and
- CP518, Final Notice – Return Delinquency (and CP618
in Spanish).
The CP259/CP959 automated notices go out when IRS has no record of a prior year return being filed. IRS sends the CP518/CP618 as a final reminder that it still has no record of a prior year tax return.
The suspension on automated notices also applies to IRS correspondence with individual taxpayers. Such notices include the CP80, Unfiled Tax Return, and the CP501, Balance Due — 1st Notice.
Behind on employment tax returns
In 2021, a Treasury Inspector General for Tax Administration (TIGTA) audit revealed that, at the end of 2020, IRS still needed to process millions of employment tax returns and other business returns.
As noted in the TIGTA report, the backlog got started when the pandemic hit. Early on, IRS pushed certain filing deadlines back by three months to July 15, 2020.
The problem still looms in 2022, with frustration growing as some CFOs simply want to receive tax credits offered to them by COVID-related laws. They included the:
- Families First Coronavirus Response Act
- Coronavirus Aid, Relief, and Economic Security Act, and
- American Rescue Plan Act.
At least now, with some automated notices on hold, confusing communication initiated by IRS should let up.
But CFOs reaching out for answers and conclusions from IRS may still have to wait.
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