IRS to resume sending balance due notices to taxpayers

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The Internal Revenue Service (IRS) said it will restart issuing balance due notices to taxpayers soon.

In May, the agency temporarily halted the issuance of the 500 series notice including CP501, CP503, and CP504 that informs taxpayers regarding their balance due. The suspension was caused by a large backlog of mail related to the COVID-19 pandemic.

The IRS was forced to close some of its mail processing to comply with state guidelines to help prevent the spread of the coronavirus pandemic. The agency temporarily stored millions of pieces of mail in trailers.

In a statement, the agency said, “The mail backlog is now caught up enough to account for the timely mailed payments. Some taxpayers will begin seeing updated notices in late October or early November, the updated 500 series notices with current issuance and payment dates.”

The CP501 notice alerts individual taxpayers that they have a balance due and what their payment options are. The CP503 informs taxpayers that they may be subject to a lien if they don’t pay promptly. The CP504 notice alerts taxpayers that they must pay their balance immediately or face a levy on their state income tax refunds.

IRS offers penalty relief to taxpayers affected by COVID-19, disasters, other circumstances

According to the IRS, taxpayers who are currently struggling and unable to pay immediately must consider the available payment options. However, interests and penalties will continue to accrue.

For those affected by the COVID-19 pandemic or other situations beyond their control such as the death of a loved one, serious illness, natural disasters, wildfires, and other disturbances may be qualified for relief from penalties. They must submit documents to establish and prove reasonable cause to the IRS.

“Reasonable Cause is based on all the facts and circumstances in your situation. We will consider any reason which establishes that you used all ordinary business care and prudence to meet your Federal tax obligations but were nevertheless unable to do so,” according to the agency.

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