If you know you owe federal taxes, but you still have not received an IRS balance due notice, it is possible that your notice was affected by the automatic mailing suspension announced by the IRS last year. Due to the backlog created by the pandemic, many amended and original returns are still being processed.
This means it is possible the system shows taxes are owed but a pending return has already addressed the issue. To prevent confusion, many automatic notices have been paused until these filings can be worked through.
To ensure you stay compliant with the IRS, it is important to understand the impact of these suspended notices and how they may affect taxes you owe the IRS.
Which IRS Balance Due Notices Were Suspended?
Some notices usually sent to individuals for outstanding balances due and to address unfiled tax returns are currently suspended. These IRS notices include: CP59, CP516, CP518, CP501, CP503, and CP504.
In the case of outstanding balances, the final notice of intent to levy is also being withheld. The Withholding Compliance Letter that is used to give notice that federal withholding is below what is required is also included in the suspension.
For businesses, letters giving notice about missed filing years are on pause.
If I Don’t Receive a Balance Due Notice, Does this Mean the IRS Forgot I Owe Taxes??
Not receiving a balance due notice does not eliminate federal taxes you owe and does not mean the IRS forgot your balance due. Even with automated notices suspended, any outstanding taxes owed on your account will continue to accrue interest and penalties, so it is important to take care of your tax debt as soon as possible.
Even with automated notices suspended, any outstanding taxes owed on your account will continue to accrue interest and penalties, so it is important to take care of your tax debt as soon as possible.
When it comes to federal tax liens, garnishing wages, levying bank accounts, and offsetting refunds, there are statutory requirements for notifying taxpayers before starting a levy, placing a property lien, or seizing eligible payments to reduce the amount owed.
In most cases, the automated letters are meant to cover these requirements, so suspension of these letters can lead to a suspension of the traditional collection methods they reference. These letters also cover the potential impact on your passport status if the balance remains unpaid, so passport revocation and denial to renew can also be suspended.
However, this only covers certain automated letters. Case-specific individuals and businesses who have been assigned an IRS employee may still receive these notices through a manual process that will fulfill the requirements to begin collection methods.
How Do I Know What I Owe the IRS, Including Penalties and Interest, If the IRS Hasn’t Sent a Balance Due Notice?
The easiest and fastest way to get an updated balance for what you owe the IRS is to set up or log in to your online account at IRS.gov. Your online tax account will show you a current tax balance due, including interest and penalties, and offers convenient online payment options.
You can also find records of different actions that have been taken on your account and information regarding any questions you may have.
What Are My IRS Relief Options to Pay Off My Full Tax Balance When I Can’t Afford to Pay?
If you have gotten your updated balance and know you are unable to send in the full payment, you have several options available to make your tax repayment more budget-friendly or even pause your payments altogether.
A payment arrangement can be made if you are current on your tax filings, allowing you to request manageable monthly payments to bring your balance due down over time.
An Offer in Compromise, or OIC, is an option if payment in full or installments are financially out of reach. This opens the door for the taxpayer and the IRS to reach a reduced settlement amount in place of the full balance of taxes owed. Paying this offer amount settles the tax liability entirely.
For those who are experiencing financial hardship and can show any tax payments required will make them unable to meet their basic living expenses, it may qualify them to have their accounts reported as Currently Not Collectible. This temporarily stops IRS collection proceedings for a time until the taxpayer’s financial situation improves.
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