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TaxWatch: A severely backlogged IRS with ‘limited resources’ temporarily halts a slew of tax-return notices


The IRS says it’s going to stop mailing out more than a dozen notices to taxpayers as it keeps trying to reduce paperwork and consternation amid the current tax season, and a backlog of unprocessed returns from last year.

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

Earlier this month, the agency said it was pausing letters which stated it didn’t have records of an income-tax return even though the taxpayer paid up.

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 the odds are the IRS may already have the documents and data it’s looking for with the notices.

“Some taxpayers and tax professionals may still receive these notices during the next few weeks. Generally, there is no need to call or respond to the notice as the IRS continues to process prior-year tax returns as quickly as possible,” the agency said.

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

The suspended notices include letters that are formally titled CP59 and CP759, which are both notices of no return submitted and CP518 and CP618, which are final notices of no submitted return.

The suspended balance-due notices include letters that are formally titled CP501, CP503 and CP504 — the last being a final notice and an alert that the IRS is planning to levy for the balance.

“These letters can be stressful for the people who receive them after they’ve done everything right to avoid getting on the wrong side of the taxman.”

However bureaucratic it sounds, these letters can be stressful for the people who receive them after they’ve done everything right to avoid getting on the wrong side of the taxman. Fixing the matter can be time-consuming for a person trying to speak with someone at the IRS, especially if the person on hold has their own job to do.

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

Though tax professional organizations say there’s even more the IRS can do to help taxpayers, the IRS says it may need Congressional law changes in certain instances.
One solution would be paying bigger salaries to attract more employees in a tight labor market, one IRS watchdog said this week.

The agency has been trying to fill positions to work down the backlog, but many jobs for the task have pay grades under $25,000 a year, Erin Collins, the National Taxpayer Advocate inside the IRS told a Congressional committee. So far, 179 of 5,000 positions have been filled, Collins said.

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