The IRS has temporarily stopped the mailing of three collection notices – the CP501, the CP503 and the CP504 – that go to taxpayers who owe back taxes. Although the IRS continues to make significant reductions in the backlog of unopened mail that developed while most IRS operations were closed due to COVID-19, this temporary adjustment to processing is intended to reduce any possible confusion that might be occur with delays in processing correspondence received from taxpayers.
IRS Notices CP501, CP503, CP504
The IRS is taking the step to avoid confusion for taxpayers who previously received a balance due notice (CP14) and mailed a payment to the IRS; however, that payment may still be unopened. The CP501, the CP503 and the CP504 are follow-up collection notices that are normally sent automatically to taxpayers who do not respond to the CP14. These automatic follow-up notices will be temporarily stopped until the IRS catches up on the backlog of mail. The IRS will continue to monitor the mail inventory to determine the appropriate time to resume sending the follow-up notices. However, taxpayers who have received but not yet responded to a CP14 balance due notice are encouraged to promptly respond.
In addition, the IRS has previously announced that payments in unopened mail will be posted and credited on the date the IRS received them – rather than the date opened and processed by them. The IRS reminds taxpayers in this situation they should not cancel their checks and should ensure funds continue to be available so the IRS can process them to avoid potential penalties and interest. To provide fair and equitable treatment, the IRS is also providing relief from bad check penalties for dishonored checks the agency received between March 1 and July 15 due to delays in this IRS processing.
As the IRS works to stop these mailings at its processing centers, some taxpayers and tax professionals may still receive these collection notices during the next few weeks due to delivery of existing mailings.
Due to high call volumes, the IRS suggests waiting to contact the agency about any unprocessed paper payments still pending.
Help With IRS Collection Notices
If you owe back taxes to the IRS and need representation in resolving a collection notice, call the Boca Raton office of East Coast Tax Consulting at 561-826-9303 to schedule an appointment.