Updated as of October 23, 2020
IRS to restart sending 500 series balance due notices:
The IRS will resume issuing the 500 series balance due notices to taxpayers later in October. These notices were paused on May 9 due to COVID-19.
Although the IRS continued to issue most agency notices, the 500 series were suspended temporarily because of a backlog of mail at the IRS due to COVID-19. The mail backlog is now caught up enough to account for the timely mailed payments. Some taxpayers will begin seeing in late October or early November, the updated 500 series notices with current issuance and payment dates.
The 500 series includes three different types of notices that alert taxpayers about varying stages of nonpayment — the CP501, the CP503, and the CP504.
The CP501 notice alerts individual taxpayers that they still have a balance due and what their options are, while the CP503 alerts them that the IRS hasn’t heard from them and they may be subject to a lien if they don’t pay. The CP504 alerts taxpayers that they must pay their balances immediately or possibly face a levy of their state income tax refunds. These series of notices are generally sent to taxpayers if they don’t respond to or pay their initial notice and demand CP14.
Taxpayers who were impacted by the pandemic or other circumstances may qualify for relief from penalties due to reasonable cause if they made an effort to comply with the requirements of the law, but were unable to meet their tax obligations, due to facts and circumstances beyond their control.
Updated as of August 31, 2020
New under Taxpayer Assistance Centers:
IRS approves temporary use of e-signatures for certain forms: To protect the health of taxpayers and tax professionals, the IRS will temporarily allow the use of digital signatures on certain forms that cannot be filed electronically. The forms can be submitted with digital signatures if mailed by or on December 31, 2020.
The change will help to reduce in-person contact and lessen the risk to taxpayers and tax professionals during the COVID-19 pandemic, allowing both groups to work remotely to timely file forms. The IRS continues to review long-term actions involving digital signatures.
Updated as of August 25, 2020
IRS Working to Reduce CAF Backlog; Make Future Digital Improvements: We are working hard to reduce the backlog of third-party authorizations. However, due to site closures relating to COVID-19 concerns, we currently are exceeding our five-business day target for approval. Our current time frame for authorization approval is approximately 15 business days. Please consider the additional approval time and plan accordingly. We request you do not submit duplicate authorizations as duplicate filings will only cause further delays. We expect to have full staffing in place soon and reduce the wait time.
Updated as of August 3, 2020
The Internal Revenue Service reminds taxpayers and tax professionals to use electronic options to support social distancing and speed the processing of tax returns, refunds, and payments.
To protect the public and employees, and in compliance with orders of local health authorities around the country, certain IRS services such as live assistance on telephones, processing paper tax returns, and responding to correspondence continue to be extremely limited. Any tax return which requires review, whether it was filed electronically or on paper, may also take longer because many review processes cannot be done virtually. While some volunteer tax preparation sites are operating at a reduced capacity, most remain closed until further notice.
- IRS Working to Reduce the Centralized Authorization File (CAF) Backlog; Make Future Digital Improvements:
We are working hard to reduce the backlog of third-party authorizations. However, due to site closures relating to COVID-19 concerns, we currently are exceeding our five-business day target for approval. Our current time frame for authorization approval is approximately 15 business days (so it could actually take 23 days to process). Please consider the additional approval time and plan accordingly. We request you do not submit duplicate authorizations as duplicate filings will only cause further delays. We expect to have full staffing in place soon and reduce the wait time.
Also, the IRS acknowledges the burden on taxpayers and the tax professional community to apply physical signatures to forms, especially during these unprecedented times. The IRS is working on a solution to provide for the acceptance of Forms 8821 and 2848 with electronic signature images by early 2021. The IRS will continue to work on accepting digital transmissions of these forms in support of the Taxpayer First Act.
- Taxpayer Assistance Centers:
On Monday, June 29, 2020, the IRS began opening its Taxpayer Assistance Centers (TACs) to the public in phases. To ensure the safety of the public and employees, people seeking in-person assistance at a TAC will need to call 844-545-5640 to make an appointment. Appointments will be available if people need assistance for authentication of identity and document validation related to tax return filing or application for an Individual Taxpayer Identification Number; Sailing Clearances required for foreign travel by resident and non-resident aliens leaving the United States; assistance with Economic Impact Payment Issues; and cash payments. For an up-to-date listing of TAC locations as they are opened, go to Contact Your Local IRS Office.
Updated as of March 2024
As of 2024, the agency has resumed collections. It’s alerting taxpayers by sending out LT38. The agency is also sending out CP504 notices threatening tax levies and CP59 and CP3219N notices to taxpayers who haven’t filed. The COVID-era collection break is over, and individuals and businesses who owe tax debts should take action soon before the IRS starts garnishing wages, seizing assets, auditing returns, and taking other involuntary collection actions.
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