TIGTA: IRS Sent Almost 90K Premature Collection Notices

Chris Gaetano
Published Date:
Sep 21, 2021
The Treasury Inspector General for Tax Administration (TIGTA) said that the IRS issued 89,338 premature Notices and Demand for tax that were generated for 87,542 individual taxpayers who filed Tax Year 2019 tax returns before the COVID-19 filing date extension of July 15, 2020.

TIGTA said that the IRS, at the start of the pandemic, closed many of its sites for months at a time, which had the effect of postponing everyday operations like mailing notices and receiving and processing correspondence. Upon reopening its print sites, the IRS decided to clear the backlog of notices, even though they had been generated before numerous tax relief measures were passed. 

These notices showed that balances were owed even though the taxes were not actually due because of the filing extension. Although the majority of these Notices and Demand included stuffers to explain the correct notice and payment due dates, TIGTA said taxpayers could be confused as to how to proceed, whether they received a stuffer of explanation with their notice or not, simply due to the original notices including incorrect information.

TIGTA faulted the IRS for the problem, saying it had the opportunity to prevent undue burden to taxpayers by purging the outdated and incorrect notices and sending them at a later date. It did, however, offer praise for properly suspending defaults on Installment Agreements, passport certifications to the State Department, new account transfers to private collection agencies, systemic filings of Notices of Federal Tax Lien, systemic and automated levies, and seizures. It also said that the IRS also took corrective action with a portion, though not all, taxpayers who had received erroneous notices. 

This is not the first time this year that erroneous IRS notices have bedeviled taxpayers. In February, the National Taxpayer Advocate said the agency, due to a computer glitch, had sent 109,000 erroneous notices to people saying they did not qualify for the full stimulus payment. 

Click here to see more of the latest news from the NYSSCPA.