Nobody wants to get a letter from the IRS. However, they dread the thought of receiving a detailed bill for federal income taxes they have already paid when they open their mail.
Many are aware that they sent the funds before the tax deadline. However, they are examining a bill that details “What you owe” in terms of taxes, fines, and interest. There is also a warning that warns fines may accrue if you don’t make your payment by the deadline.
The Internal Revenue Service is sending out millions of letters, or what it refers to as its CP14 Notice.
Due to the IRS backlog, some of the automatic notices are being delivered inadvertently.
When taxpayers get a CP14 Notice, they frequently have to pay because they somehow underpaid the federal government. Perhaps there are outstanding payroll taxes for a side business with employees, or perhaps there are past taxes to be paid.
A lot of these notices start to come in around June or July. However, these alerts can appear at any time of the year.
Normally, the CP14 notice demands that a payment be made within 21 days. If the taxpayer doesn’t make the required payment within 60 days, the IRS may begin collection efforts.
Some taxpayers who have already made payments to their creditors are miffed that the IRS has now sent them a CP14 Notice for payment. In 2022, some of these were transmitted inadvertently. You must consider your personal circumstances.
The IRS will send you an automated reminder any time you file a federal income tax return with a balance due of $5 or more and there isn’t a math error to blame.
However, according to tax experts, the IRS backlog has resulted in a few mistakes along the road.
Last year, we revealed that the IRS sent misleading letters and inaccurate alerts to individuals throughout the summer of 2021.
However, a large portion of that misunderstanding was caused by an extremely tardy change in the tax laws governing how unemployment payments would be taxed. In the end, these early filers didn’t owe money since the IRS would issue a refund once it made the necessary adjustments for this late tax modification.
Even though the IRS is dealing with a backlog of paperwork, Mark Steber, chief tax officer at Jackson Hewitt Tax Service, said he has not heard of any significant issue regarding incorrect CP14 notices or lost tax payments at the IRS this year.
Erroneous letters do not seem to be occurring as frequently this year, according to Melanie Lauridsen, director of Tax Practice & Ethics at the American Institute of CPAs.
She did, however, point out that the organisation has pushed for the suspension of several automated notices in 2022 purely because the IRS is dealing with a massive backlog of paper returns and correspondence.
But what’s this? One letter from the IRS may start a new round of correspondence, adding to the backlog of paper.
According to IRS spokesman Luis Garcia, the agency said on June 15 that it has halted issuing the majority of balance due notices, except the first billing notice following the processing of a tax return. However, take note that revenue officials are acting within the scope of their regular authority and may issue notices regarding the cases they are handling.
The IRS attributed its early 2022 requirement to handle a larger-than-usual inventory of paper tax returns and correspondence filed throughout 2021 to problems connected to the epidemic and manpower shortages.
What should you do if you unintentionally receive one of these bills?
Naturally, you want to confirm that the bill was paid as your initial action. Do you have documentation proving that funds were taken from your bank account to pay the tax bill? Has the tax bill been paid?
Get your paperwork organised. Consult with a tax expert. Ensure that you have documentation proving the tax bill was paid.
Should you write a letter to prove that you have paid the bill in full? Most likely not, said Lauridsen.
However, in addition to the supporting paperwork, you should maintain the letter on file.
“Replying to physical mail merely adds to the backlog, if you answer at all. The system is not improved by it. According to Lauridsen, they are not requesting that individuals send in more mail.
“If you submit a letter, it will be added to the backlog again.”
If you do reply by mail, send it certified so you have documentation that you actually did.
After receiving this initial warning, you typically shouldn’t freak out because the IRS is processing returns. However, a subsequent notification could be more concerning.
If you owe money to the IRS, there is a way to apply online for a payment plan, including instalment agreements. If you can’t pay the whole amount owing by the due date on the notification, you should set up a payment plan. Or, if they disagree, taxpayers must speak with the IRS.
The National Taxpayer Advocate advises contacting the IRS at the toll-free number on your notification’s top right corner if you disagree with the notice.
Some claim that calling exactly at 8 a.m. Eastern time at the beginning of the day will increase your chances of getting through.
You must have your supporting documents on hand when you make that call, such as cancelled checks and an amended return.
Lauridsen cautioned that calling the IRS is difficult due to the sometimes long waits on the phone lines.
Steber advised taxpayers to consider the possibility that, on occasion, things may not have gone as planned and that they may be in debt. As a result, take extra care to record whether a bill has been paid before simply calling.
The IRS office in Detroit acts.
In other tax-related news, taxpayers in Michigan who intend to visit an IRS office should be aware that the Taxpayer Assistance Center has left its offices at 500 Woodward Avenue.
Located at 477 Michigan Avenue in the Patrick V. McNamara Federal Office Building, the IRS Taxpayer Assistance Center for Detroit is now operational.
Less than a mile separates the new TAC location from the old one. The Rosa Parks Transit Center, is an off-street lot, and metered street parking area close to the new location, according to the IRS.
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Every aid facility is open by appointment only. Call 844-545-5640 to make an appointment at the Detroit centre. Between 8:30 a.m. and 4:30 p.m., Monday through Friday, the office is open.
