The IRS Is Knocking: Get Ready For a Summer Of Tax Collection Notices!

Automated collection notices that were temporarily stopped in response to the COVID-19 pandemic may begin coming back this summer, according to a report from the IRS. Although CP14 notices were not paused during the pandemic, other types of common notices, including PC501, which provides the first indication of outstanding balances to individual taxpayers, and CP259, which is sent to businesses when the IRS does not have a record of a tax return from the previous year, were suspended. The initiation of collection notices this summer will affect taxpayers who owe back taxes or have a dispute over a tax bill.

Collection Cases

IRS Notices Formerly Halted Due To Backlog

In February of this year, the IRS indicated that they were temporarily pausing both individual and business collection notices so that the agency’s workforce could put their effort into working through a backlog of unprocessed tax returns, amended tax returns, and other taxpayer correspondence. During this suspension, taxpayers were temporarily not receiving notices of overdue taxes and other tax disputes and were also unable to set up payment agreements either online or over the phone. However, penalties and interest on back payments continued to accrue.

Last November, national taxpayer advocate Erin Collins suggested that the collection notices would soon be restarting gradually. These sentiments were repeated by the IRS Deputy Commissioner for Collection and Operations Support, Darren Guillot, who additionally stated that the resuming of collection notices would be gradual because the IRS does not want to flood their agency and employees with an overload of work.

Notices To Gradually Resume This Summer

More recently, Nikki Johnson, who is the director of Headquarters Collection of the Small Business/Self-Employed Division at the IRS, stated that taxpayers can expect to likely see collection notices again at the end of the summer and that the agency has been working hard to determine the best method of initiating notices without overwhelming taxpayers or the agency’s employees. She stated, “We are not obviously going to turn on the spigot and issue all the millions of notices that were suspended.” Other experts in the field agree that initiating all of the past due notices would be detrimental.

IRS Collection Notice Process May Change

Individual taxpayers receive a total of four collection notices regarding their overdue taxes, while businesses get just two. The IRS may begin to take a softer approach to collection as they change the procedures by encouraging taxpayers to contact the agency directly in response to their notice instead of immediately taking levy action against prolonged unpaid taxes. This will give taxpayers and businesses additional opportunities to resolve their unpaid accounts online or over the phone. These changes reflect other procedural extensions and amendments that were made during the pandemic. Taxpayers who receive the new collection notices this summer and beyond are encouraged to work with the IRS so that they can take advantage of tools and relief that may be available.

Get Legal Advice For Your IRS Collection Notices

If you’re received a collection notice from the IRS that you have been unable to resolve, call Silver Law, PLC, for legal advice from the leading Arizona tax attorney firm. As former IRS employees with decades of experience as private tax attorneys, we will provide effective and aggressive representation that protects your rights and interests. We know that overdue taxes and the threat of IRS legal action can be extremely stressful, but we can help. Let us work to resolve tax disputes and overdue notices on your behalf so you can get back to living your life without anxiety. Call one of our offices today to speak with an Arizona tax attorney.

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