IRS Resumes Automatically Generated Correspondence with Taxpayers by Joseph Leocata, JD, CPA, MBA
The IRS significantly reduced the backlog of tax returns and other taxpayer correspondence it could not process during the pandemic. Consequently, the agency announced it would soon resume mailing collection notices to affected taxpayers. The agency previously suspended these automatically generated notices in early 2022.
According to the IRS, the pandemic and related introductions of new tax laws during that period overwhelmed the agency and created a bottleneck of more than 12 million tax returns to process or correct. As of May 20, 2023, it had just 4 million unprocessed individual and business tax returns for 2022 and 2021 awaiting review, missing information, correction or special handling by the IRS. These include paper and electronically filed Forms 1040, U.S. Individual Income Tax Return; Forms 1040-X, Amended U.S. Individual Income Tax Return; Forms 941, Employer’s Quarterly Federal Tax Return; Forms 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund; and Forms W-7, Application for Individual Taxpayer Identification Number (ITIN).
In most instances, there is no action taxpayers must take at this time. However, if the IRS needs additional information or if it needed to change a taxpayer’s return, it would contact the affected taxpayer via U.S. postal mail. At no time will the IRS initiate contact with taxpayers via phone, email or text, nor will it make threats of imprisonment or deportation. The IRS will also resume mailing to affected taxpayers collections notices, notices of unfiled or delinquent tax returns, and letters 2802C advising taxpayers of incorrect withholding.
If you receive written correspondence from the IRS, contact your accountants and advisors to help you promptly take appropriate action. Failure to do so can result in the accrual of interest and penalties and missing appeal deadlines.
About the Author: Joseph Leocata, JD, CPA, MBA, is a senior manager of tax services with Berkowitz Pollack Brant Advisors + CPAs, where he works with individuals and businesses on a broad range of federal, state, and local tax issues, including representation before the IRS, state and local authorities on tax controversy matters. He can be reached at the CPA firm’s New York City office at (646) 213-7600 or info@bpbcpa.com.
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