100+ Years of Combined Tax Resolution Experience.
Start 2024 on the right foot by settling your tax liabilities with the IRS. With the announcement describing the end of a two-year-long automated collection system pause, it’s helpful to understand what you need to do in the next few months.
The IRS temporarily suspended all automatic notices, including more than a dozen additional reminder letters such as balance due and unfiled tax return notices, back in February 2022. This decision resulted from an extensive backlog of unprocessed returns and forms intensified by the effects of the COVID-19 pandemic. During this hiatus, the IRS has intentionally reallocated resources and implemented informed strategies to improve their inventory, streamline their process and minimize the burden on individuals and businesses.
Typically, the IRS collection process timeline begins with initial CP14 or CP80 notices sent to taxpayers with unpaid balances or unfiled returns. Taxpayers typically receive follow-up notices and reminders every five weeks after that, such as CP59 or CP501 forms. While initial notices have been distributed over the last two years, these reminders haven’t been. The IRS plans to send out a special notice by the end of January, alerting taxpayers with tax balances before 2022 to their situation, how it can be resolved and the amount of relief they’re receiving. Regardless of what you receive, the letter should outline your next steps.
While reminders have been suspended, failure-to-pay penalties and interest have continued to accrue. The IRS is enacting a $1 billion relief plan for over 4.7 million taxpayers, businesses, estates, trusts and tax-exempt entities to reduce taxpayer pressure. Relief is expected to roll out automatically and eligible recipients will not be required to take any action. If you already took care of your failure-to-pay penalties, you’ll receive a refund or credit.
So, who can expect to receive this relief? Well, this plan is directed at those who have accrued late payment penalties for tax years 2020 and 2021, for whom the IRS didn’t send automated reminders. These recipients were actively involved in the collection process or were issued a balance between February 2022 and December 2023. Similarly, taxpayers who can count on relief must have filed specific 1040, 1120, 1041 or 990-T forms for an assessed tax of less than $100,000. The IRS offers options for those who don’t fit this criteria.
Parties not included in the relief plan must repay their liabilities in full. If you’ve been affected by the pause on the IRS automated collection system but aren’t eligible for relief, it’s wise to get on top of it quickly. Fortunately, our team at Polston Tax can help you deal with your unpaid taxes, ensuring you avoid additional penalties and consequences. We can help you take advantage of various repayment options, including:
At Polston Tax, we strive to be a partner you can trust to have your back when things get tough. Our team of skilled tax professionals works with the IRS every day, giving them a unique perspective and deep understanding of complex ideas like IRS collection statute of limitations and filing procedures. We use this knowledge to offer a comprehensive end-to-end tax service that eliminates your worry and sets you up for success.
Give Polston Tax Resolution & Accounting a call at (844) 841-9847 or reach out online for a consultation.
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