As the world gradually recovers from the impact of the COVID-19 pandemic, the Internal Revenue Service (IRS) has announced its plans to resume issuing collections notices to taxpayers, after a suspension period to alleviate the financial burden faced by individuals and businesses during the crisis. While an exact date for the resumption of these notices has not yet been announced, the IRS assures taxpayers that they will receive ample communication and time to address any outstanding issues. In a panel discussion at the ABA May Tax Meeting, Darren Guillot, Commissioner for Collection and Operation Support in the IRS Small Business/Self Employment Division, shed light on the agency’s comprehensive plan to handle the upcoming collections process.
A Thoughtful Approach
Guillot emphasized that the IRS’s approach to resuming collections notices will not involve an abrupt and unannounced reactivation. Instead, the agency intends to keep taxpayers, tax professionals, and Congress fully informed about the timing of their plans. Open and frequent communication will ensure that no one is caught off guard, allowing for smoother compliance and resolution processes.
Staggered Implementation
To prevent overwhelming the agency’s resources, Guillot stated that the issuance of different types of notices will be staggered. The IRS aims to strike a balance between resuming collections and efficiently managing the responses generated by these notices. Guillot acknowledged the potential impact on the IRS Independent Office of Appeal and highlighted the importance of giving taxpayers an opportunity to resolve their issues before resorting to the appeals process. By staggering the notice restart, the IRS seeks to offer taxpayers a chance to address their obligations without unnecessary escalations.
An Emphasis on Collaboration
Guillot outlined the collaborative efforts between the IRS and National Taxpayer Advocate, Erin Collins. He mentioned that the IRS has been incorporating her input throughout the planning process. Collins, who also participated in the panel discussion, confirmed this collaboration and added that the IRS aims to take a reasonable approach to reactivating collections. The staggered approach will not only benefit taxpayers but also alleviate the potential burden on practitioners and the Taxpayer Advocate Service.
Gentle Reminders
In an effort to support compliance and reduce the need for appeals, Guillot provided an example of the approach taxpayers can expect. If a taxpayer was set to receive a final Notice of Intent to Levy just before the pandemic-related pause, the IRS plans to send a gentle reminder notice before proceeding to the final notice. This approach benefits both taxpayers and the IRS, ensuring a more amicable resolution process. Guillot also mentioned that the IRS is exploring ways to improve communication and collection methods for past-due amounts that take into account taxpayers’ individual circumstances.
Upcoming Statutory Due Notices
In the near future, the IRS will begin generating CP-14 notices, which serve as statutory due notices. These notices are typically sent to taxpayers at the end of the tax season to inform them of any outstanding amounts owed. Taxpayers can expect to receive these notices starting in early June, signaling the initial steps towards resuming collections activities.