The IRS has made several announcements in the last few weeks regarding some changes and actions they plan to take in 2024. These mark the end of COVID-19 related slowdowns and the beginning of their efforts in action through Inflation Reduction Act funding.
IRS Collection Notices Will Resume
The IRS will begin sending automated collection reminder notices again beginning January 2024 to those Taxpayers with outstanding tax liabilities. The mailing of these notices was previously placed on hold during the COVID-19 pandemic and remained on hold as the IRS faced significant delays and backlogs.
Many Taxpayers with outstanding liabilities owed on years prior to 2022/2023 have not heard from the IRS regarding these outstanding balances owed for over a year now. Letters will now be sent alerting the Taxpayer of the outstanding liabilities and directing them to address the balances due without delay – before the next round of letters are issued in which more aggressive collection actions may be taken. Taxpayers who receive this LT38 – Reminder, Notice Resumption should address the outstanding tax issues right away.
Penalty Relief Will Be Available
The IRS has recently announced that they will offer penalty relief to approximately 4.7 billion Taxpayers who were not sent automated collection reminder notices during the pandemic. The amount of penalty relief is estimated to total approximately $1 billion and applies to approximately 5 million tax returns filed. This is done in response to the penalties and interest that continued to accrue on accounts in which no follow-up reminder notices were sent after February 2022 and applies to tax years 2020 and 2021.
This penalty relief applies to Taxpayers with assessed tax owed of less than $100,000, and were in the collections process or were issued an initial balance due notice between February 5, 2022 and December 7, 2023.
The IRS has adjusted eligible individual accounts and plans to adjust business accounts in the weeks to come. This penalty relief is automatic. If the Taxpayer has already paid the full balance, including penalties, the IRS will issue a refund or credit.
According to IRS Commissioner Danny Werfel, “As the IRS has been preparing to return to normal collection mailings, we have been concerned about taxpayers who haven’t heard from us in a while suddenly getting a larger tax bill. The IRS should be looking out for taxpayers, and this penalty relief is a common-sense approach to help people in this situation. We are taking other steps to help taxpayers with past-due bills, and we have options to help people struggling to pay.”
The failure-to-pay penalty will resume on April 1, 2024.
The IRS Has Plans for New Leadership Structure to Align with New Priorities
After 2 decades, the IRS has plans to update their leadership structure to reflect its new goals. There will now be only one Deputy IRS Commissioner, and four new IRS chief positions to oversee taxpayer service, tax compliance, information technology, and operations. The changes are to streamline efficiencies – one of many projects underway at the IRS through Inflation Reduction Act funding.
"With transformation work continuing to accelerate at the IRS, this is the right time to make these organizational adjustments that will support the agency's improvements for taxpayers and provide the flexibility needed to add efficiency and expand collaboration across the agency. Many foundational changes in tax administration have occurred since the last major IRS organizational change, and this new alignment will help us in our ongoing transformation work to modernize the nation's tax system. This will improve our leadership model and streamline our internal processes for the benefit of taxpayers, the tax community, our employees and ultimately the nation” – Danny Werfel, IRS Commissioner.
These changes are set to take place early 2024.
Do you have outstanding IRS tax issues? 2024 WILL be the year to address them, and we recommend you do it on your terms vs. the IRS’ which may involve seizure, garnishments, levies, and more. Contact Bryson Law Firm, LLC today to schedule a free, initial consultation with one of our Attorneys to discuss how to make 2024 your year to RESOLVE your IRS troubles.
