01 Jul How to Handle the Influx of IRS Notices
IRS notices are generally sent by computers and processed by humans, and that’s a big problem. The computers are fast and efficient at noticing discrepancies and math errors, and they can generate millions of official notices that are mailed out to taxpayers every year. With CP 2000 being the most common one, these notices tell the taxpayer what they think was misreported and ask for either money or information.
Humans, on the other hand, are notoriously slow and inefficient in dealing with computerized notices. Taxpayers procrastinate and avoid dealing with them, sometimes allowing multiple computer-generated notices to pile up. But even worse, between budget cuts and the Covid-19 epidemic, the IRS has become seriously backlogged in dealing with people’s responses to these notices. Human beings must read these responses and interpret them and the laws involved, which can take time. Even in good times, the IRS told people to wait for 6 to 12 weeks for responses to taxpayer mail, and that number may be doubled with the current backlog. Even worse, the computers remain blissfully unaware that a response has been sent, and they keep generating more notices until someone at the IRS updates them.
What to do? Keep copies of all notices and responses, with dates. Use CRM software if necessary for large quantities of notices. Send a check for $1 with your response if you want proof that the IRS received it. (They will always cash the check even if you don’t owe anything.) Be patient and remain aware of the delays at the IRS- don’t panic. As long as you’ve responded in a timely manner to all notices, they can’t penalize you for their own situation.
Written by Dan Connors