News and Updates from the IRS

June 17, 2021

Subject:  State of the IRS: The Internal Revenue Service Collection Unit Covid-19 Policy Update

 

The IRS is resuming the enforcement of collections notices as of June 15, 2021.  Taxpayers with unresolved tax due balances will soon receive from the United States Postal Service certified or regular mail CP504 Intent to seize property notices or IRS LT 11 Intent to seize property tax letter. The IRS suspended its systemic and automated lien and levy programs during the pandemic since April 2020.

 

With the country emerging out of the COVID-19 pandemic, economic activity is returning to normal. Therefore, IRS is returning to its normal collection casework processes this summer.  The IRS will send notices automatically to taxpayers with account balances.  Beginning June 15, 2021, the IRS is beginning to follow up with taxpayers who failed to respond to prior notices.

 

Taxpayers with 2020 and prior account balances will be notified that they have 30 days (45 if out of the country) to respond or pay their tax bills. Taxpayers who fail to respond to these additional letters could be subject to levies or Federal Tax Lien filings. The IRS Automated Collections System (ACS) will systematically begin to issue levies and Notice of Federal Tax Liens starting August 15, 2021.

 

Effective July 15, 2021, the IRS will resume reporting to the State Department delinquent taxpayers with Federal, State, and Local Tax Liens filed against them. The IRS notifications to the State Department are to revoke taxpayers' passports with seriously delinquent tax debt.   The revocation prevents the State Department from renewing or obtaining a new passport. If taxpayers fail to pay, establish a payment plan, or agree with the IRS that the taxes are uncollectible will not be allowed to travel outside the United States.

 

Please e-mail the Tax Resolution Team for collection alternatives.

Check your tax account on the IRS website: www.irs.gov/payments/view-your-tax-account 

 

What to do if you receive a CP504 Notice in the Mail from the IRS:

1. Scan the notice. If you do not have access to a scanner, please download and use the free Adobe Scan App on your phone. 

2. Email the notice to taxresolution@frostcpas.com 

 

 

 

Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline

IR-2021-59, March 17, 2021

WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

"This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities," said IRS Commissioner Chuck Rettig. "Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to."

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.

Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until October 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.

This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn't subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer.

State tax returns

The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.

Winter storm disaster relief for Louisiana, Oklahoma and Texas 

Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline.

For more information about this disaster relief, visit the disaster relief page on IRS.gov.

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