During the shutdown, the IRS generated more than 20 million notices of various types; however, due to the challenges of the ongoing pandemic, the IRS was unable to mail the notices in a timely manner. Therefore, some of them have due dates that have passed. For that reason, if you have received one of these notices in the mail you are probably confused and distressed, believing that you may have missed a response deadline.
The IRS is enclosing an insert in its mailings, which consist of an additional page at the end of the notice that provides updated due date information. It is critical that you read through all pages included in IRS notices and pay special attention to the due dates on the insert. Here’s what you can expect:
Initial balance due notices
The IRS has begun mailing the backlog of 1.5 million balance due notices (a.k.a. notice and demand) informing taxpayers that their tax has been assessed and they have a balance due. The law requires the IRS to send these notices within 60 days of making an assessment. If you received an initial balance due notice, you should look for the insert included at the end, Notice 1052-A, Important! You Have More Time to Make Your Payment. It specifies that:
- For returns due on or after April 1, 2020, and before July 15, 2020, taxpayers have until July 15, 2020, to make a payment before interest or penalties apply.
- For income tax returns due before April 1, 2020, or employment or excise returns due on or after April 1, 2020, taxpayers have until July 10, 2020, to make a payment before interest or penalties apply.
Notice 1052-A provides a link to the IRS.gov webpage on coronavirus relief, which provides further details about the relief for filing and payment deadlines.
Math error notices increasing the amount of tax
A subset of the notice and demand backlog is math error notices, which include critical deadlines. When the IRS proposes an increase in tax for a simple mathematical or clerical error, the law provides the taxpayer with 60 days to request a reversal of the math error adjustment. If you do not timely request a reversal, the tax is assessed and you lose the opportunity to appeal the liability in U.S. Tax Court, which is the only opportunity to challenge the liability in court (assuming that it is not resolved through contesting the assessment or through appeal) prior to paying it.
The Taxpayer Advocate Service (TAS) worked with the IRS to create a special insert for these notices to ensure taxpayers know what they need to do to protect this fundamental taxpayer right.
The backlog of math error notices include Notice 1052-B, Important! You Have More Time to Make Your Payment, which provides taxpayers with 60 days after the notice is sent to contact the IRS to request a reversal.
Collection due process and other backlog notices
For other notices in the backlog that provide a deadline for action, TAS is working with the IRS to develop insert language that will clarify the new deadlines. For Collection Due Process (CDP) notices, TAS has recommended the IRS provide a revised deadline to request a CDP hearing that is 30 days after the IRS mails out its backlog CDP notices— and include an insert to that effect. This approach will help ensure that your right to request an appeal in an independent forum is not compromised during the coronavirus emergency.
Even with these efforts, I have seen a lot of confusion lately with notice response due dates. In addition to reading the insert, you should check the IRS’s website and look for updates. If you have received a notice from the IRS recently and are confused about due dates, please feel free to give me a call.