The IRS this week is sending millions of Americans letters about delinquent taxes.
In a recent statement, the federal tax agency said the automated letters and “collection notices” to people with tax debts before to the tax year 2022 as non-profits, businesses, and trusts with debts prior to 2023.
“These notices and letters were previously paused due to the pandemic and high inventories at the IRS but will gradually resume during the next several months,” the release says. “Current tax year 2022 individual and third quarter 2023 business taxpayers began receiving automated collection notices this fall as the IRS took steps to return to business as usual.”
The agency, which has the lowest approval rating of any in the government, said that says that the pandemic pause “meant that some taxpayers who have long-standing tax debt have not received a formal letter or notice from the IRS in more than a year while some of this older collection work has been paused,” it said. “To help the taxpayers in this category as the normal processes resume, the IRS will be issuing a special reminder letter to them starting next month.”
READ: The IRS collected a record in taxes but seeks more
What the letter will include is a reminder to the taxpayer regarding their “liability” and will tell them to contact the agency or make “alternative arrangements” to settle the debt. Taxpayers are also urged to “carefully read any letter or notice they receive” before they call the IRS.
The IRS is waiving penalties for some 5 million filers who were impacted by the pandemic in 2020 and 2021.
Generally, the CP14 notice is the first one the agency sends out for an unpaid tax balance, which is usually followed by three to four reminder letters that are sent out every five weeks or so, said Darren Guillot, who previously served as an IRS deputy commissioner.
READ: IRS data reveals true size of nation’s nonprofits
Multiple tax specialists warned that Americans who receive these letters could face significant penalties, including funds being taken out of their bank accounts by the federal agency.
The Biden administration announced in 2021 an unprecedented crackdown on Americans who use payment apps like PayPal, Venmo, Zelle, Google Pay, Apple Pay and others. The IRS now wants to know when your account has had at least $600 in deposits. The new and unpopular rules also require additional reporting on sales by online retailers and individuals like eBay and Amazon. The $600 threshold for reporting replaced the previous $20,000 threshold.
–Metro Voice and wire services
