Collection Notices ResumeThe IRS announced on October 23, 2020 that it would resume mailing collection notices in the “500” series. These are the routine notices that follow assessments. None of them grant rights to a CDP hearing, but if you owe taxes, you will received at least one of them before you do receive a notice that grants you the right to a Collection Due Process Hearing.

Here is the IRS Collection Notice Announcement

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 collection notices 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 of Collection Letters

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 are unable to pay are encouraged to consider available payment options as penalties and interest continue to accrue.

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. Taxpayers should call the toll-free number on their notice to request penalty relief due to reasonable cause if they feel they qualify and have the necessary supporting documentation. More information on reasonable cause relief is available at IRS.gov.

 

Lysander