The IRS is gearing up to restart its automated collection process, but it’s trying a gentler approach first.
Taxpayers with a balance due in tax years 2020 and 2021 began receiving a new letter — designated the LT38 — late this January offering a friendly reminder that they do, in fact, need to pay up. These soft letters will be sent out on a staggered basis over the next few months to taxpayers who had received a CP500 series balance due reminder notice, Nikki Johnson, IRS director of collection in the Small Business/Self-Employed Division, said during a January 30 IRS webinar.
Nearly two years ago, the IRS decided to stop sending automated collection reminder notices after it became swamped in piles of unprocessed mail and paper tax returns from taxpayers. That resulted in taxpayers who may have already sent in a payment or response to the IRS receiving automated notices claiming otherwise, creating confusion on all sides. Last December, the IRS announced it was preparing to restart the process in early 2024.
“We’re aware these bills may be a surprise,” Johnson said. To ease taxpayers into it, the IRS granted automatic penalty relief for the tax year 2020 and 2021 returns that fall within the eligibility period, she said.
Further, after the soft letters are sent and the automated collection reminder notices resume, the IRS will wait... To Read More Please Subscribe to NovaTax.
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