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Received a wrong notice from the IRS? Don’t worry!

Last week, the IRS had suspended sending balance-due notices to taxpayers while it continues to process its backlog of unopened mail. The IRS is also working to identify and correct penalties it applied to some employers who reduced their payroll tax deposits to claim COVID-19 relief-related credits. The three types of taxpayer follow-up notices that are suspended are CP501, CP503, and CP504. Which are notices that the IRS sends after first notifying a taxpayer by a CP14 letter of tax account balance due and not receiving a response.

While some employers have been receiving these letters from the IRS, don't be alarmed as the IRS is trying to reduce their backlog that was accumulated by COVID-19 that slowed down operations. So they are trying to lessen the confusion that could occur with all of this. The IRS said that due to the delays, it would waive bad-check penalties on dishonored checks that it had received between March 1 and July 15, 2020.

The IRS also stated that some employers that had properly reduced their payroll tax deposits may have an instance of reported liabilities on Form 941 that did not match the reduction in deposits for every pay date and the employers were assessed a failure-to-deposit penalty on the difference. They are going to be taking steps to ensure that the penalty is prevented and correct those that have been identified. While some employers might receive an erroneous notice, the IRS stated that they don't need to take any additional action.

If you need help or have any questions, please call us at (832) 295-3353. You may also set up an appointment with us at

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