According to recent reports, the IRS has a backlog of more than 6 million unprocessed individual returns; however, it has opened the majority of its mail and processed the payments accompanying these returns. As a result, many taxpayers received a CP-80 notice, which states the IRS has a credit on the taxpayer’s account but has not yet received a 2020 tax return. In most cases, though, the IRS has received the tax return, but just haven’t processed it.
This erroneous notice contains more conflicting information, as the CP-80 notice states, “Please file today. Send your signed tax return to the address shown on the top of your notice.” However, the IRS has stated in many news releases NOT to resubmit a tax return. The notice also states “If you don’t file your return or contact us, you may lose this credit. The Internal Revenue Code sets strict time limits for refunding or transferring credits.”
Here’s an example of the CP-80 notice:
In addition, NATP has heard reports of taxpayers receiving their payments back in the mail from the IRS. Other taxpayers have received, in addition to the CP-80 notice, failure to file notices resulting in penalties, liens, etc.
NATP reached out to our IRS liaison to find out what taxpayers and tax professionals should do when these situations occur. We’ll be in communication with our members when we receive additional guidance.
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About NATP ResearchNATP Federal Tax Researchers
Our on-site team of tax professionals answers more than 20,000 questions each year on a variety of federal tax issues affecting your clients. Several of our tax researchers are CPAs and enrolled agents with broad tax knowledge and access to the most diverse research library in the industry.
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Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.