Veteran Investigative Reporter Kurt Dillon, an accredited and degreed journalist, compiled facts for this piece from interviews with IRS personnel, Jackson Hewitt Tax Service, CBS News press releases, and the Internal Revenue Service’s website at IRS.gov.
The IRS recently began issuing millions of generic letters to people it suspects have underpaid their taxes in previous years, according to a news release posted on its website. If you or someone you know receives one of these letters, known as a CP14, don’t throw it away.
If you do, you risk facing harsh penalties and interest, as well as the possibility of incarceration if the debt is large enough. Mark Steber, the chief tax information officer at Jackson Hewitt, confirmed this.
CP14s, as well as many other types of form letters, have been suspended by the IRS in recent years because of COVID-19 limits. The agency said in February of 2020 that it would stop issuing various types of letters, but in March, it announced that the CP14s will be resumed.
What leads you to receive a CP14 from the Internal Revenue Service?
In our post, we go through this in greater detail: The IRS threw away 30 million documents.
The IRS uses a computer programme called the Automated Underreporter Program (AUP) to compare our tax returns to data received from third-party creditors with whom we have a business (banks, credit card companies, insurance companies, etc…).
When that system detects a discrepancy between our prepared tax returns and the information it receives from our third-party creditors, it raises a red flag, preventing our returns from being processed electronically and requiring a human evaluation, clarification, and override before they can be completed. To address the challenges limiting business tax return electronic filing growth, a service-wide strategy is required.
However, as part of our investigation, we discovered an investigation report from the Treasury Inspector General for Tax Administration (TIGTA), which first discovered the destruction of 30 million tax documents and made that information public. The report, titled Effects of the COVID-19 Pandemic on Business Tax Return Processing Operations, explains that the documents destroyed during the impromptu purge of backlogged documents were all small business documents, with no personal tax filing documents being destroyed.
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It’s also worth noting that the documents destroyed were not tax refund documents prepared by taxpayer businesses, but documents received by the IRS from the previously mentioned third-party creditors. According to the report, all of those documents, referred to as “information returns,” were destroyed, and sources within the IRS have confirmed this.
As a result, we can deduce that destroying those documents will have no bearing on individual taxpayer refunds or returns. As a result, you should not disregard an IRS Form CP14 if you receive one.
In our article, you’ll find more specific recommendations to think about: More than 69,000 people have viewed the IRS – CP14, Don’t Ignore It.
