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Balance Due Notices

Balance Due Notices

The IRS has suspended the mailing of three notices – the CP-501, the CP-503 and the CP-504 – that go to taxpayers who have a balance due on their taxes. Although the IRS continues to make significant reductions in the backlog of unopened mail that developed while most IRS operations were closed due to COVID-19, this temporary adjustment to processing is intended to lessen any possible confusion that might be associated with delays in processing correspondence received from taxpayers.

The IRS is taking the step to avoid confusion for taxpayers who previously received a balance due notice (CP-14) and mailed a payment to the IRS; however, that payment may still be unopened. The CP-501, the CP-503 and the CP-504 are follow-up notices are typically automatically sent to taxpayers who do not respond to the CP-14. These automatic follow-up notices will be temporarily stopped until the backlog of mail is reduced. The IRS will continue to assess the mail inventory to determine the appropriate time to resume the follow-up notices. However, taxpayers who have received but not yet responded to a CP-14 balance due notice are encouraged to promptly respond.

In addition, the IRS has previously announced that these payments in the unopened mail will be posted and credited on the date the IRS received them – rather than the date the agency opened and processed them. The IRS reminds taxpayers in this situation they should not cancel their checks and should ensure funds continue to be available so the IRS can process them to avoid potential penalties and interest.

To provide fair and equitable treatment, the IRS is also providing relief from bad check penalties for dishonored checks the agency received between March 1 and July 15 due to delays in this IRS processing. However, interest and other penalties may still apply.

Illustration. Suppose a taxpayer sent in a check, and the IRS received it on March 2 for a tax that was due on January 15. The IRS did not process the check until August 20, at which time the check did not clear. The IRS will impose interest and penalties for a late payment calculated to the March 2 receipt date. But it will not tack on a bad check penalty.

As the IRS works to stop these mailings at our processing centers, some taxpayers and tax professionals may still receive these notices during the next few weeks due to delivery of existing mailings.

Due to high call volumes, the IRS suggests waiting to contact the agency about any unprocessed paper payments still pending.