CP14s anyone?

Technical topics regarding tax preparation.
#1
EADave  
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Hello all!

I've had about 7 clients this week send me CP14 letters they received, indicating no payment was made to their 2021 tax account. Only one in 7 haven't yet paid, the others provided me with payment confirmations using various methods (IRS Direct Pay, PayTaxUSA, etc).

Anyone have any insight into this, is the IRS sending out these notices in error? Just an FYI, these clients filed and paid in March, and only one paid in their spouse's name/SSN; mismatch payment error.

Frustrating, how do you charge the client to check into the fact that they properly paid their balances due in full? Argh!!!
 

#2
JoJoCPA  
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Yup. I’ve had lots of these. I normally don’t charge to deal with these issues I see them so infrequently. But now it’s sucking up an enormous amount of time. Gonna start charging a bit. Not sure how much yet.
 

#3
EADave  
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Something similar happened last year (or was it 2020), then out comes the IRS press release, “Ignore those notices, we sent them in error.” Here’s to hoping…
 

#4
JoJoCPA  
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Mine weren’t in error. They can’t find the payments when I call. They have to trace them.
 

#5
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EADave wrote:Frustrating, how do you charge the client to check into the fact that they properly paid their balances due in full? Argh!!!


You give client 3 options.

1 - ignore and wait for subsequent notices
2 - they call IRS
3 - you call IRS to deal with it but that you charge for this

Most clients choose option 1 and the issue usually goes away on its own.
 

#6
taxcpa  
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I have one where the client paid part of the amount and has been trying to set up a payment plan. The partial payment does not show up. They just can't seem to get through to the IRS or set up the plan on line.

30+ year client who owes due to a one time event. I'll file the 2848 and deal with it gratis.
 

#7
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Spidell Publishing sent this out 6/15 regarding CP14 notices:

"We’ve heard from numerous tax professionals that their clients are receiving erroneous CP14 notices for nonpayment of balance due for 2021 tax returns even though the payments were debited from their clients’ bank accounts. We have reached out to the IRS and confirmed that this appears to be a systemwide issue. The IRS is still investigating which taxpayers were impacted and has yet to determine what actions it will take to correct these notices. We will keep you posted as we learn more."

Our PA IRS liaison said he would not answer these notices pending clarification from IRS (since it does seem to be systemic).
 

#8
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Thank you for this post. I have the same issues. What a mess ....
 

#9
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NCACPA's director of advocacy just posted this:

On Friday, June 24, NCACPA sent the following message to the senators and representatives of North Carolina's congressional delegation:

On behalf of the North Carolina Association of Certified Public Accountants, I am writing to alert you about a recent issue with the Internal Revenue Service that is affecting a significant number of taxpayers in North Carolina and around the nation.

Earlier this month, the IRS issued CP14 Notices to more than 9 million taxpayers (Background: IRC Section 6303 requires the issuance of a CP14 Notice if the IRS thinks you have an unpaid balance for the last tax year. The computer-generated notice gives the taxpayer 21 days to respond with payment of the balance due, after which the IRS can begin the process of collecting the tax by levy or by filing a notice of federal tax lien. The letter further warns that penalties and interest will accrue if payment is not made.).

Our concern stems from dozens of reports by NCACPA members whose clients received a CP14 Notice in error. In each case, clients have proof that their tax payment was processed as documented by cancelled checks and bank statements. In several instances, the taxpayers even have IRS acknowledgement of electronic payment.

The IRS’s Taxpayer Advocate Service (TAS) advises taxpayers who disagree with the notice to “Call the IRS at the toll-free number on the top right corner of your notice. Please have your paperwork (such as cancelled checks, amended return, etc.) ready when you call.”

Unfortunately, contacting the IRS by phone has become an exercise in frustration for most taxpayers and tax professionals. In its midyear Objectives Report to Congress issued just this week, the TAS reports that 90 percent of calls to the IRS this year are going unanswered. I’ve also received reports from CPAs that contacting the IRS on its Practitioner Priority Service hotline has become equally impossible in the last two weeks (most likely due to a high volume of calls related to erroneous CP14 Notices). This is particularly disappointing because the IRS agents who staff the PPS hotline have a reputation for providing excellent service to practitioners.

Responding in writing to an erroneous CP14 Notice may not be much better for affected taxpayers. As the TAS midyear report points out, the amount of time it takes for the IRS to process a taxpayer’s written response currently averages 251 days—more than triple the processing time from FY2019. I asked our local IRS Stakeholder Liaison for the best address for written correspondence and/or a fax number, but he has been unable to provide an answer.

NCACPA respectfully urges your office to contact the IRS about this issue and ask the agency:

What specific guidance can the IRS offer to taxpayers and tax practitioners to resolve these erroneous notices in a prompt and efficient manner?
What is causing the recent decline in service on the Practitioner Priority Service hotline, and what steps is the IRS taking to resolve the matter?
What is the IRS doing to ensure that further collection action is suspended for taxpayers who received an erroneous notice?
What factors contributed to the generation of these erroneous automated notices, and what is the IRS going to do to prevent it from happening again?
Thank you for your attention to this matter.

NCACPA and AICPA Advocacy staff are collaborating on follow-up work with members of the delegation.
 

#10
JR1  
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Just got one from a client....payment is noted, but they changed the tax without explanation.
Go Blackhawks! Go Pack Go!
Remembering our son, Ben Jan 22, 1992 to Aug 26, 2011.
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#11
EADave  
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As Flava Flav would say, “IRS is a joke in your town!”

Something’s got to give. If the IRS can’t handle the processing of a simple electronic payment, we need a new system. Take the money wasted from the EPA and give it to the IRS. Simple. Problem solved overnight. Good night.
 


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