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IRS to Resume Issuing Balance-Due Notices

Posted on Oct. 26, 2020

After a five-and-a-half-month hiatus, the IRS will start sending series 500 balance-due notices to taxpayers by the end of this month.

The mail backlog that prompted the IRS to stop issuing nonpayment notices May 6 is “now caught up enough to account for the timely mailed payments,” the IRS said in a statement October 23. The statement came just days after an IRS official said the IRS was developing a plan to resume sending the notices.

“Some taxpayers will begin seeing in late October or early November, the updated 500 series notices with current issuance and payment dates,” the IRS statement said.

In response to the coronavirus pandemic, the IRS suspended mailing CP501 notices about taxpayer tax account nonpayment, CP503 notices requesting that a taxpayer contact the agency about an unpaid bill, and CP504 notices warning that a taxpayer’s state income tax refund may be taken to pay a federal tax debt.

Taxpayers can cite a “reasonable cause” for failing to meet their payment obligations under circumstances and facts beyond their control, the IRS noted.

The distribution of IRS collection notices has attracted the attention of Congress, the Treasury Inspector General for Tax Administration, and taxpayer rights advocates.

House Ways and Means Committee Chair Richard E. Neal, D-Mass., complained in an August 19 letter to the IRS that it had sent two rounds of payment notices with incorrect deadlines to 1.5 million taxpayers who might have already sent their payments by mail. Neal asked the IRS to stop sending balance-due notices until it cleared its correspondence backlog; the IRS agreed two days later.

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