The IRS is reporting that it is resuming “certain collection and enforcement processes that had been suspended because of the coronavirus pandemic.”
On June 15, 2021, this process kicked off as the IRS started contacting taxpayers who have not responded to prior balance due notices.
Since April 2020, the IRS halted its systemic and automated lien and levy programs for pandemic relief, but the agency is now planning to continue its normal collection casework processes.
See Relax Tax’s Tax Audit Assistance at relaxtax.com/audit
Balance due notices, levies, and liens
Typically, balance due notices are sent automatically following the tax filing deadline if the IRS believes the taxpayer has a tax bill.
Starting June 15, 2021, the IRS started sending follow-up letters to those taxpayers who haven’t responded to prior notices. The notification will state that they have 30 days (45 days if out of the country) to respond or pay their tax bills.
If a taxpayer fails to respond to these additional letters, they “could be subject to levies or Notice of Federal Tax Lien filings beginning August 15, 2021.”
See this related post from Dennis Harabin: Avoiding IRS Tax Underpayment Penalties
Congress considers our tax system a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-earn” requirement. These include Payroll withholding for employees; Pension withholding for retirees; and Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.
Levies (in coordination with other state and federal agencies)
Beginning on July 15, 2021, the IRS will start to levy taxpayer assets through these programs:
- Federal Payment Levy Program (FPLP, “whereby the IRS can collect a taxpayer's overdue taxes through a continuous levy on certain federal payments disbursed by Bureau of Fiscal Services”);
- State Income Tax Levy Program (SITLP, “whereby the IRS can levy a taxpayer's state tax refund”); and
- Municipal Tax Levy Program (MTLP, “whereby the IRS can levy a taxpayer's city/municipal tax refund”).
If you have any questions about these changes, please contact our office at 551-249-1040 for assistance.
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