Navigating Through the Restart of Automated Collection Notices and Penalty Relief

Navigating Through the Restart of Automated Collection Notices and Penalty Relief

All right, folks, I see it is now the top of the 
hour. For those of you just joining us, welcome   To today's webinar, Navigating the Restart of 
Automated Collection Notices and Penalty Relief.   We're so glad you're joining us today. My name 
is Evette Davis, and I am a Senior Stakeholder   Liaison with the Internal Revenue Service, and I 
will be your moderator for today's webinar, which   Is slated for 60 minutes. This webinar offers one 
IRS continuing education credit, certificates of   Completion will be emailed to the registration 
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you. At those times, a polling style feature will   Pop-up on your screen with a question and multiple 
choice answers. Select the response you believe is  

Correct by clicking on the radio button next to 
your selection and then click Submit. Some people   May not get the polling question and this may 
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Materials dropdown arrow on the left side of   Your screen. We're going to take some time right 
now and test the polling feature. So folks, here's   Your opportunity to ensure your pop-up blocker is 
not on, so you can retrieve the polling questions   Throughout today's presentation. So here's the 
question. Have you ever viewed an IRS National   Webinar recording from the IRS Video Portal? Is 
your response A, yes; B, no; or C, where is the   IRS Video Portal? Take a moment, click the radio 
button, it should have popped up on your screen.   Click the radio button that corresponds to your 
answer. Have you ever viewed an IRS National   Webinar recording from the IRS video portal? A, 
yes; B, no; or C, where is the IRS Video Portal?   Okay. Let's give you a few more seconds to make 
a selection. All right, folks, let's go ahead and   Close the polling and stop the polling now. And 
let's see how the majority of you responded. Okay,   I see the majority of you responded, yes, you 
have viewed the IRS National Webinar recording   From the IRS Video Portal. That is amazing. So 
glad so many of you have already used that tool.   We hope you received the polling question and that 
you were able to submit your answer. If not, now's   The time to check your pop-up blocker. Please make 
sure you have it turned off. Again, we've included   Several technical documents that describe how you 
can allow pop-ups based on the browser you are   Using. Just click on the Materials dropdown arrow 
on the left side of your screen and download your   Browser document. Okay, again, welcome, we're glad 
you joined us for today's webinar. Before we move   Along with our session, let me make sure you're 
in the right place. Today's webinar is Navigating   Through the Restart of Automated Collection 
Notices and Penalty Relief. This webinar is   Scheduled for approximately 60 minutes from the 
top of the hour. Now, let me introduce today's   Speakers. We have Nikki Johnson. She serves as 
the Director of Headquarters Collection in the   Small Business/Self-Employed Division and provides 
corporate-wide guidance, coordination, and support   On all aspects of the collection process. Nikki 
leads three directorates, including collection   Policy, collection inventory delivery system, 
and quality technical support. And she provides   Comprehensive service to the field, campus, and 
specialty collection programs. Welcome, Nikki. We   Also have Rocco Steco. Rocco currently serves as 
the Director of Collection Policy. In this role,   He's responsible for providing executive oversight 
and policy guidance on collection processes,   Overseeing program coordination, and providing 
technical guidance for field and campus collection   Programs. He's also responsible for reviewing and 
coordinating procedural guidelines and policies.  

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We've got a great group of presenters today. I'm 
going to go ahead and turn it over now to Nikki to   Begin our objectives for today's webinar. Nikki, 
the floor is yours. Well, thank you, Evette,   For that great introduction. Today's objectives 
are to provide an overview of the automated   Collection notice restart. We also will provide 
information on the new special reminder letter,   The Letter 38; information on how the typical 
sequence of automated notices may change;   Information on how the IRS will gradually send 
notices this tax season; discuss penalty relief   For tax years 2020 and 2021; we will also provide 
helpful resources available to resolve tax debt.   At the end of this webcast, we will also have 
a live Q&A session to answer any questions you   May have, and we hope that you have. Now, let's 
share the reason collection notices paused. Now,   Many of you may have had that question, why were 
automated collection reminder notices paused? Due   To the unprecedented effects of the COVID-19 
pandemic, the IRS temporarily suspended the   Mailing of automated reminders to pay overdue tax 
bills starting in February 2022. Now, these bills   Would have normally been issued as a follow-up 
reminder after the initial balance to notice   Tax bills received in the mail. And to be clear, 
the IRS never paused the initial tax bill. We sent   Out to tax bills during this period, just these 
follow-up notices. So the IRS did not suspend   The mailing of the first or initial balance due 
notices for taxpayers, such as the CP14, which   Is generally issued to individuals; and the CP161, 
which is issued to businesses. So, although, these   Follow-up notices were suspended, the penalty for 
failure to pay continued to accrue for taxpayers   Who did not fully pay their balance in response to 
their initial bill. Now, with the pandemic behind   Us, we will be resuming mailing of collection 
notices for older tax periods starting next month.   Now, I will talk about the resumption of automated 
collection notices. As many of you are aware,   Current tax year 2022, individual and third 
quarter 2023 business taxpayers began receiving   Automated collection notices in the fall of 2023 
as the IRS took steps to resume or return to   Normal business as usual. The IRS is also taking 
steps in advance of resuming normal collection   Notices for tax years 2020 and 2021 to help 
taxpayers with their unpaid tax bills, including   Some people who have not received a notice from 
the IRS in more than a year. Now to help taxpayers   As the normal process resumes, the IRS will be 
issuing a special reminder notice starting in   January 2024, which we will talk about further 
on the next slide. Now, the notice will alert   Taxpayers of their liability, easy ways to pay, 
and their updated balance. We are also offering   Penalty relief, which we will talk about in 
greater detail later on in this presentation. Now,   As we return to normal operations, we will resume 
sending automated collection notices for all years   In February 2024. IRS is carefully evaluating 
the impact to operations as we resume notices.   So let's share some information about the special 
reminder letter, which is called the Letter 38,   Reminder, Notice Resumption. To further assist 
taxpayers as our normal processes resume, the IRS  

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Will be issuing a special reminder letter 
starting in January. Taxpayers in Automated   Collection System, or commonly known as ACS, will 
receive a Letter 38, Reminder, Notice Resumption,   In the next several months advising them of the 
following. Their updated balance with penalty   Relief reflected if applicable. We will talk more 
about penalty relief again later in this webinar.   They will also be advised of how to access their 
account, pay quickly, and avoid added interest and   Penalties. On this letter will QR codes, which 
are included for quick online account access.   This will allow taxpayers to pay online directly 
from your bank account, pay with your credit card,   Debit card, or even apply for a payment plan. 
The letter will also provide options to help if   You can't pay your tax liability in full. It will 
include a summary of the bill with the tax period,   Tax form, amount owed, interest, failure to pay 
penalty assessed and the total amount due shown.   We urge taxpayers and tax professionals to read 
the notice carefully and follow the instructions   On the notice to take action to resolve the 
account. Additional information can be found   On the webpage at Please review the 
information on Letter 38 notice and the taxpayer's   Particular, their particular tax situation within. 
Now, this will include taxpayers an opportunity to   Address their tax bill before the next round of 
letters are issued. Now that's important because   Time does not make these past-due tax bills get 
any better. Now, Evette, I see we have time for   The first polling question. I'll turn it over 
to you. Yes, Nikki. Thank you. Okay, audience,   Let's go, this is our first polling question 
and it's about what Ms. Nikki just talked about,   Letter 38, Reminder, Notice Resumption includes 
what? A, updated balance, bill summary, and   Options to help if you can't pay in full; B, QR 
code to quickly access accounts, make a payment,   And apply for a payment plan; C, both A and B; or 
is the response, D, none of the above. Okay, take   A minute. Let's look at the question again. Click 
the radio button that you believe most closely   Answers this question. Letter 38, the Reminder, 
Notice Resumption, it includes what? A, updated   Balance, bill summary, and options to help you if 
you can't full pay; B, QR code to quickly access   The account, make a payment, and apply for payment 
plan; C, both A and B; or D, none of the above.   All right. Let's close the polling right now, 
and let's share the correct answer on the next   Slide. And the correct response is C, both A and 
B, and I see that 96% of you responded correctly.   Woo! All right, Nikki, we are off to a great 
start. Let's go ahead and carry on with changes to   The typical sequence of automated notices. You've 
got their attention. All right, thank you. Well,   So as we restart notices, you may see changes to 
the typical sequence of automated notices that   You would normally expect. Now, tax accounts that 
did not receive automated reminder notices due to   The pandemic-related pause that were moved to 
ACS status should expect, as I stated earlier,   A Letter 38 reminder notice starting in January 
2024. These will go out on a staggered basis for   Several months. Impacted taxpayers including 
those, who may have received their last CP500  

Series notice, such as a CP501, 503, or 504 
in 2022. Now, these bills may come as a bit   Of a surprise to some taxpayers. And given that 
penalties and interest continue to accrue under   The law, the bill amount for those who weren't 
paying will be larger than the last time that they   Received a letter from the IRS. Also included 
in these notices are taxpayers with new tax   Liabilities for tax year 2022, who were also 
impacted by the pause. Now these accounts will   Be joined with existing debt and their accounts 
will be moved to ACS and receive a Letter 38   Notice. Now, I would cover the gradual approach to 
sending the notices. The timing of the mailing of   CP500 series automated collection notices will 
change. Prior to 2024, CP500 series automated   Collection notices were mailed every 5 weeks, for 
instance. If you received a CP501 and you were   Due the next sequential notice, it would have come 
out 5 weeks later. So starting in January 2024,   This has been extended to 8 weeks. We believe 
the increased timing of notices will improve   The taxpayer experience. It also will allow 
additional time for taxpayers to find solutions   To resolve their balances. It will also allow time 
for tax professionals to assist clients and allow   For time for the IRS to process and update tax 
account information. So, now, we're moving on   To penalty relief for tax years 2020 and 2021. 
Rocco, take it away. Thank you, Nikki. One of   The biggest challenges for struggling taxpayers is 
figuring out how to pay their past due tax debt.   During the pandemic, these challenges became even 
more severe for some taxpayers. With the pandemic   Behind us and mailing of automated collection 
notices resuming, we are aware that these bills   May be somewhat of a surprise for some taxpayers. 
And given that the penalties and interest continue   To accrue under the law, the bill amounts for 
those who weren't paying will be larger than the   Last time they received a letter from the IRS. The 
penalty is usually 0.5% of the tax owed for each   Month or part of a month that the tax return 
is late, up to 25% of the tax bill, and these   Penalties add up quickly. For these affected 
taxpayers, we know this is a tough situation,   But the IRS is looking out for taxpayers and 
we are providing important new steps to help   People with past due tax bills. A major component 
of the steps we are taking to help taxpayers is   Waiving failure to pay penalties affected by 
this situation for tax years 2020 and 2021.   The IRS will be waiving over $1 billion in tax 
penalties for nearly 5 million taxpayers. Many   People receiving this relief are average 
hardworking taxpayers. Nearly 70% of the   Individual taxpayers receiving penalty relief will 
have income under $100,000 a year. This relief   Translates into about a $206 reduction per person 
for each tax year. Eligible taxpayers include:   Individuals, businesses, trusts, estate and 
tax-exempt organizations that filed the Form 1040,   1120, or 1041 series, as well as the 990-T income 
tax returns for tax years 2020 and 2021, with an   Assessed income of less than $100,000. Eligible 
taxpayers should have received an initial balance   Due notice, typically, the CP14 for individuals, 
or the CP161 for businesses, between February 5,  

2022, and December 7, 2023. The $100,000 
limit applies separately to each return   And each entity. The failure to pay penalty will 
resume on April 1, 2024, for taxpayers eligible   For relief. Additional details on this penalty 
relief can be found in Notice 2024-7. Let me   Further explain penalty relief. The failure to pay 
penalty relief is automatic. Eligible taxpayers   Don't need to take any action to get it. Eligible 
taxpayers who already paid their full balance will   Benefit as well. If a taxpayer already full 
paid, already paid failure to pay penalties   Related to their 2020 and 2021 tax years, the IRS 
will issue a refund or credit the payment toward   Another outstanding tax liability. The IRS began 
sending the first round of refunds or credits in   December. If a taxpayer does not receive a refund, 
a special reminder notice may be sent with their   Updated balance beginning in early 2024. This 
applies to taxpayers in ACS status as well.   Taxpayers with questions on penalty relief can 
contact the IRS after March 31, 2024, which will   Allow time for our systems to process relief on 
these accounts. Taxpayers not eligible for this   Automatic relief also have options. They may 
use existing penalty relief procedures such as   Applying for relief under the reasonable cause 
criteria or the First-Time Abate program. Visit for details or talk to a 
trusted tax professional. Evette, I think it's   Time for our second polling question. All right, 
Rocco, you've got it. Okay, folks, it is now time   For our second polling question. And here we go. 
Taxpayers eligible for penalty relief include:   A, individuals, businesses, trusts, estates, and 
tax-exempt assessed income tax less than $100,000;   B, filed certain Forms 1040, 1120, 1041 and 990-T, 
income tax returns for tax years 2020 or 2021; C,   In the IRS collection notice process between 
February 5, 2022 and December 7, 2023; or D,   All of the above? Now, we just heard Rocco talk 
about all of this information. So I know you   Know it. Let's go. Let's get to that 100%. Take 
a few minutes, review the question again. Think   About what you just heard and what you already 
read and what you know. Click the radio button   You believe most closely answers this question. 
A little bit longer question, so I want to give   You a little bit more time to kind of review it 
and make your selection. Taxpayers eligible for   Penalty relief include what? A, B, C, or, D, all 
of the above. Okay. Let's go ahead and stop the   Polling now and let's share the correct response 
on the next slide. And the correct response is, D,   All of the above. Now, let's see what percentage 
of you responded correctly. Oh my goodness, 94% of   You responded correctly. We are on a roll, Rocco. 
All right. I'm going to turn it back over to you.   And, I think, you're going to talk about what you 
should know about penalties and interest next.   Yes. Thank you, Evette. I will start with the 
failure to pay penalty. Some may wonder why the   IRS isn't removing interest from these past due 
bills. That's because under federal law, the IRS   Is required to charge interest when people don't 
pay their balance on time. We do not legally have   The authority to waive this interest. To reduce 
your bill, it is important to file and pay your  

Taxes as soon as possible. We'll take a moment to 
refresh you on the basics of penalty and interest.   The failure to pay penalty applies if a taxpayer 
doesn't pay the taxes they report on their tax   Return by the due date, or if the taxpayer 
doesn't pay the amount required to be shown on   Their return within 21 calendar days of receiving 
a notice in demand for payment, or 10 business   Days if the amount is greater than $100,000. Now, 
I will cover failure to file penalty and interest.   Taxpayers who owe tax and don't file on time may 
be charged a failure-to-file penalty. This penalty   Is usually 5% of the tax owed for each month 
or part of a month that the tax return is late,   Up to 25%. The IRS is required by law to charge 
interest when a tax balance is not paid on time.   Interest cannot be reduced due to reasonable 
cause. Interest is based on the amount of tax owed   For each day it is not paid in full. The interest 
is compounded daily, so it is assessed on the   Previous day's balance plus the interest. Interest 
rates are determined every 3 months. It can vary   Based on type of tax, for example, individual 
or business tax liabilities. More information is   Available on interest on the interest page 
of Evette, I see, it's time for our   Third polling question. Yes, it is, Rocco. Now, 
listen, folks, let's pay attention to this one.   They're trying to trick you a little bit here, 
but you've got it. A failure-to-file penalty is:   A, a penalty for taxpayers who don't pay the tax 
they report on their tax return by the due date;   B, a penalty for taxpayers who owe tax and don't 
file on time; C, a penalty that is required by   Law when tax balances are not paid on time; 
or D, none of the above. Look at the question,   Think about what you just heard, Rocco state. What 
you already know to be true. Look at the question,   Make your selection. All right, here's the one 
that most closely answers this question. Once   Again, a failure-to-file penalty is: A, a penalty 
for taxpayers who don't pay the tax they report on   Their tax return by the due date; B, a penalty for 
taxpayers who owe tax and don't file on time; C, a   Penalty that is required by law when tax balances 
are not paid on time; or D, none of the above.   Okay. We've got this. Let's close the polling. 
Let's stop the polling now and we'll share the   Correct response on the next slide. Okay, folks, 
the correct response is, B, a failure-to-file   Penalty is a penalty for taxpayers who owe tax and 
don't file on time. Now, let's see what percentage   Of you responded correctly. Let's see here. Okay, 
I think we're at 69%. Okay, I think it's on our   Side. It might be the wording, I don't know. But 
Rocco, can you help us out please and tell us why   B is the correct response? Why is it B? Sure. So 
we did talk about two different types of penalty   As well as interest. The first penalty being 
failure to pay. And the failure to pay penalty   Is for underpayments on tax returns that are 
filed and not paid. And the failure to file   Penalty is for returns that are not filed or are 
filed late. So the answer to the question here   Was with regard to the failure-to-file penalty, 
which is a late file tax return. All right. Yeah.   Okay. Thanks so much, Rocco. I believe we're 
going to turn it over to Nikki next. Nikki,  

The floor is yours. Thank you, Evette. So as we 
stated previously, we understand that these bills   Arriving may come as a bit of a surprise for some 
taxpayers. And given that penalties and interests   Continue to accrue under law, the bill amounts for 
those who weren't paying will be larger than the   Last time they received a letter from the IRS. 
Now, to help taxpayers with these unpaid bills,   The IRS provides easy options to deal with 
unpaid tax bills and avoid additional interest   And penalties. People receiving these reminder 
letters should remember that there are frequently   Overlooked options that can help them like setting 
up an automatic payment plan or catching up with   Their tax filings for those with unfiled returns. 
For this part of the presentation, we will talk   About some helpful resources for taxpayers to 
resolve their tax debt. It's really important   That taxpayers with these bills take a little time 
to understand their tax situation. On,   There are lots of information that can help 
people. They can go to,   Which has helpful information. For people 
with complex or uncertain tax situations,   A trusted tax professional is always a great place 
to turn. As an additional resource to taxpayers   And tax professionals, we recently launched a 
new web page, Get help with tax debt. That can be   Easily accessed by selecting, Pay, at the top of Now, you can find information on paying   Your bill, what to do if you can't pay in full 
and options available to get help. Now, let's talk   About getting help with tax debt. The IRS offers 
several payment options, including help for those   Struggling to pay. For taxpayers who cannot pay in 
full, the IRS encourages them to pay what they can   And explore a variety of payment options available 
for the remaining balance, including getting   A loan to pay the amount due. In many cases, 
loan costs may be lower than the combination   Of interest and penalties the IRS must charge by 
law. Now, we're going to discuss three options to   Help with tax debt, including paying the tax bill 
in full, paying part of your balance, or if you   Can't pay anything right now. We'll discuss that 
as well. Now, let's review the information on how   To resolve tax debt. Taxpayers are encouraged to 
pay their tax bills in full whenever possible.   They can visit for a variety 
of ways to pay. On the next couple of slides,   We will take a moment to go over how to pay 
electronically and other options to pay on   The payments page. If there is a balance due on a 
tax return, paying electronically is a convenient   Way to pay. Now, there are options for initiating 
payments online by phone or from a mobile device.   The IRS uses the latest encryption technology, 
so paying electronically is a safe and secure   Way to pay. When you use any of the IRS electronic 
payment options, it puts you in control of paying   Your tax bill and gives you peace of mind. So 
payments can be scheduled in advance and you'll   Receive confirmation after it's submitted. It's 
quick, easy, secure, and much faster than mailing   In a check or money order. IRS electronic payment 
options are available on our Payments page. Now,   I will turn it over to Rocco to discuss 
the payment webpage on Thank you,  

Nikki. The IRS has several options available to 
help you resolve your tax bill. First step is   To pay what you can now to avoid interest and 
penalties. If you need additional time to pay   Your tax bill, you can apply for a payment 
plan, also called an installment agreement,   Or an online payment agreement. This will allow 
you to pay your balance over time. Taxpayers   Needing a payment plan are encouraged to set one 
up online to save time. You can apply online at 
Once you complete your online application,   You will receive immediate notification of whether 
your payment plan has been approved. There's no   Paperwork and no need to call, write, or visit 
the IRS to use the online payment agreement.   Setup fees may apply for some type of plans. 
An offer in compromise lets you settle your   Tax debt for less than you owe. When talking 
about an offer in compromise, formerly known   As the Fresh Start program, we want to add 
a caution. People with unpaid tax bills also   Need to be wary about aggressive marketing by some 
places that overinflate promises of wiping out tax   Debt. Some people simply don't qualify for these 
programs, and we encourage people first to review   Our offer in compromise guidelines on that 
can answer some basic questions about eligibility   Without having to pay a third party. Please visit to check   Eligibility. Let's share the options if you can't 
pay anything now. The IRS has several options to   Help you resolve your tax bill. The last option 
to resolve your tax debt we will talk about today   Is a temporarily delay in collection of your tax 
debt. Taxpayers can contact the IRS to request a   Temporary delay of the collection process. If the 
IRS determines a taxpayer is unable to pay, it may   Delay collection until the taxpayer's financial 
condition improves. Penalties and interest   Continue to accrue until the taxpayer pays the 
full amount. Now, Evette, I believe it's time   For our fourth and final polling question. Okay, 
Rocco, you've got it. Yes, folks. It is time for   Our fourth and final polling question. Okay. So 
the question is, what are the ways to resolve tax   Debt? The ways to resolve tax debt include: A, use to find ways to pay your tax bill   In full; B, set up an online payment agreement or 
submit an offer and compromise where you can pay   Part of your bill; C, if you can't pay anything 
now because of your financial condition, you can   Ask the IRS to temporarily delay collection. Or 
D, all of the above. Okay, folks, we know this. We   Know this. We've done this before. You've helped 
your clients before. Take a few minutes to review   The question again. And then click the radio 
button, you believe, most closely answers this   Question. Okay. What are the ways to resolve tax 
debt? What do they include? A, B, C, or D? Let's   Go ahead and stop polling now, and review the 
correct response on the next slide. Okay. All   Right, folks, D is the correct response, and I see 
that 99% of you responded correctly. See, I knew   You had it. I knew you already knew the answer to 
the question. All right, Nikki, I'm going to go   Ahead and turn it over to you to share important 
reminders. Okay. We're moving right along. The  

IRS urges taxpayers to carefully read any letter 
or notice they receive before calling the IRS.   So make sure your address is correct to ensure you 
are getting notices or refunds from the IRS. It is   Important to contact the IRS and make arrangements 
to voluntarily pay the tax due. If taxpayers   Don't contact us, we may take one or more of the 
following actions to collect the taxes, including:   Filing a federal tax lien, issuing a notice of 
intent to levy or notice of right to a hearing,   Issuing a summons, or taking actions to 
certify the debt which may affect passports.   For information on the collection process, visit for information on tax   Topic 201. Evette, that's all I have. I'll turn it 
over to you. Thank you, Nikki. Thank you so much,   Rocco. Hello, again, folks. It's me, Evette Davis, 
and I'll be moderating the Q&A session. Before   We start the Q&A session, I do want to thank 
everyone for attending today's presentation,   Navigating Through the Restart of Automated 
Collection Notices and Penalty Relief. Now,   Earlier I mentioned we want to know what questions 
you have for our presenters. Several of you have   Already entered those questions, so thank you. 
But if you didn't, here's your opportunity. If you   Have not input your question, there is still time, 
so go ahead and click on the dropdown arrow next   To Ask Questions field, type in your question and 
remember, click Send. Nikki and Rocco are staying   On with us to answer your questions. Now, one 
thing before we start, we may not have enough time   To answer all the questions you submitted, but we 
will cover as many questions as time will allow.   Let's go ahead and get started so we can get to 
as many questions as possible. All right. This   First question is in reference to penalty relief. 
Okay. So why did the IRS include only taxes under   $100,000? Rocco? This is Rocco. Yes, I'll take 
that question. Anyone with taxes higher than   $100,000 are generally higher income taxpayers. 
And we've covered the majority of the taxpayers   With the taxes under $100,000. That covers most of 
the general tax paying public. Got it. Understood.   Makes sense. Okay. Next question. With collection 
notices resuming during tax season, will the IRS   Have adequate staffing available to handle 
calls from taxpayers with questions about their   Notices? Good question. Okay. This is Nikki. 
That's a great question. The IRS will closely   Monitor level of service to provide exceptional 
customer service to the nation's taxpayers and   Tax professional community. Now, because notices 
are being mailed out over a period of months,   The IRS expects to have staff available to handle 
expected call volume. The IRS has also expanded,   As we discussed earlier, the availability of 
self-service tools, such as the document upload   Tool, bots, we provide online payment plans, which 
can often help taxpayers resolve their problem   Without needing to speak to an IRS representative. 
Most taxpayers will qualify to set up a payment   Agreement with IRS using the online payment 
agreement tool. Okay. Great information. Great   Question. Great information. All right, so this 
is the next question. Why is the penalty abatement   Only for 2020 and 2021 tax years? I know a lot 
of people want to know that one. This is Rocco,  

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And I will take that. Excellent question. The 
penalty relief is for taxpayers that were affected   By COVID and changes to the IRS notices. Tax 
years 2020 and 2021 were the years primarily   Impacted by the pause in the reminder 
notices. Got it. Okay, good. Thank you,   Rocco. This is another question about the notices 
themselves. Will the notice process automatically   Begin where it ended before the pause in 
February of 2022? Who wants to take that one? No,   Not necessarily. As we discussed, in an effort to 
get it right the first time and to help taxpayers,   Beginning in January, the IRS will send a new 
notice, the Letter 38, specifically designed   To acclimate some taxpayers with unresolved 
accounts back into the collection process and   Resolving their balances. So this special notice 
will provide some time for taxpayers to fulfill   Their tax obligations or come into an agreement 
with IRS about how to do that before proceeding   To the next step in the collection process. Both 
taxpayers in the automated collection system   Will receive these taxpayer-friendly notices. 
Thank you. Very good. All right. Great   Information. Great. Thank you, Nikki. Thank you. 
Okay, so this next one is about the collection   Notice process. Let's see. What does it mean 
to enter the collection notice process? Sure,   I'll take that. Taxpayers who were sent an initial 
balance due notice have entered the collection   Notice process, and they are typically the CP14 
for individuals and the CP161 for businesses.   That first notice explains the amount owed and 
demands payment in full. It details the amount   Of tax plus penalty and interest accrued on the 
unpaid balance from the date the tax was due.   While taxpayers may not have received subsequent 
collection reminder notices, online account access   Is always available to get current balance due 
and pay tax debt. The IRS also offers several   Ways to resolve taxes if taxpayers can't pay in 
full. Very good. All right. Thank you, Rocco.   All right. Moving along, folks, you've got some 
great questions in here. This next question is,   Will the pause in notices impact the Assessment 
Statute Expiration Date that's the ASED; or the   CSED, the Collection Statute Expiration Date? Will 
the pause in the notices impact the ASED and the   CSED dates? This is Nikki. That's actually 
another great question. No, the notice pause   Does not impact statute assessment expiration 
date. Okay, all right. Nice to the point. No,   Folks. All right, so next question. Will 
taxpayers who paid their balance in full   Qualify? And the answer to that is yes. Taxpayers, 
whether individual, businesses, trusts, estates,   And tax-exempt organizations who paid their taxes 
in full will receive a refund or a credit will   Be applied to an existing tax debt. As a first 
step, the IRS began adjusting eligible individual   Accounts and followed with adjustments to business 
accounts in late December to early January. And   Then trusts, estates, and tax-exempt organizations 
will begin in late February to early March of   2024. Okay, that's great news. That's great 
news that so many will qualify for that penalty   Relief. Thank you, Rocco. Okay. Next question. 
Is this related to the simple notice redesign,  

I think about the collection notices? Yeah. Okay. 
Great. I'll take that one. So the simple notice   Redesign initiative should not be confused 
with the restart of collection notices. This   Simple notice initiative was announced by IRS on 
January 23, 2024. And it is a sweeping effort to   Simplify and clarify about 170 million letters 
sent annually to taxpayers. More information   About that process can be found on 
So no, they should not be confused with the   Notice restart. Okay. That was a good question. 
Okay. Next question. What if a taxpayer has older   Taxes do? We're talking about the penalty relief 
here. What happens to them? So penalties on tax   Years prior to 2020 are not eligible for this 
relief. Taxpayers with prior year balances will   Need to pay as much as they can to reduce the 
penalty and interest on their accounts. The IRS   Provides several options to help them resolve 
their tax debt. Okay. Very good. Thank you,   Rocco. All right. So, now, this is another great 
question from our audience here. This question is,   How long will the IRS give the taxpayer to pay 
with the Letter 38 notice before the CP500 series   Notices are sent? How long will the IRS give the 
taxpayers to pay the Letter 38 notice before any   CP500 series notices are sent? I'll take that, 
Evette. There will be a 35-day follow-up to the   Letter 38 if there's no response from a taxpayer. 
So once that letter is sent, we will follow-up   Within 35 days, so that's a great question. And 
we will determine what the next steps are at that   Point. The next notice may not be the series 
500. We're going to be doing an analysis of   Those accounts at that point to determine whether 
taxpayers have resolved their accounts or what   The next step may be. So I hope that answers your 
question. That was a great question again. Yeah,   That was a great question. Thank you, Nikki. Okay, 
next question, folks. We're getting then in. When   Will taxpayers be able to see the amount of the 
penalty relief? That's a good question. Sure,   I'll take that. While most taxpayers will be able 
to view their updated account balance online,   Only a portion will be able to see the total 
amount of the relief applied. Taxpayers with   Assessed failure to pay penalties that were 
waived should be able to see the relief by   Accessing their transcripts. However, the penalty 
relief for the accrued portion of the failure to   Pay penalty may not be displayed, but will be 
reflected in the balance due. Many of those in   The collection notice process with balanced dues 
will be sent reminder notices starting in January   2024 with their updated balances. The IRS plans 
to send these reminder notices between January   Through March of 2024. Okay. Great information. 
Great, great, great. Thank you so much. All   Right. Okay. The next question. Let's see. All 
right. So, this question is, will the letters   Like the Letter 38 also include information 
regarding penalty abatement either the first   Time penalty abatement or reasonable cause? Who 
wants to take that one? Yes, as we stated earlier,   The notices will include information regarding 
penalty relief, and also we'll take you to the   IRS landing page that will provide additional 
information, for instance, a taxpayer does not  

Qualify for automatic penalty relief, how to go 
about making a request for a reasonable cause   Penalty abatement or a first-time abatement, so 
information will be included in the notice. Okay,   So let me stick with the Letter 38 for this next 
one, too, Nikki. So with that Letter 38, will a   Letter 38 be sent for each separate year, or will 
all the years be on that Letter 38 notice? Yes,   Each year we'll receive a Letter 38. So, again, 
what we're saying was if a taxpayer has a 2020,   2021 and a 2022 tax liability, those years will be 
joined so that they can be included on the notice,   And the information on each notice will include 
the penalties' interest in what to do to pay that   Particular module. Got it. Okay. Sounds good. 
Thank you, Nikki. Thank you so much. Okay. So   This next question is about penalty relief. Does 
this relief apply to estimated tax penalties for   2020 and 2021 as well? This is Rocco. I'll take 
that. No, the estimated tax penalties apply only   If a taxpayer pays two little tax during the year 
and never accrue after the original tax filing   Deadline. Okay. All right. Okay, folks, listen, 
that was great. Thank you, Nikki. Thank you,   Rocco. That was amazing. Audience, I'm so sorry, 
that's all the time we have for questions. I do   Want to thank our presenters for sharing their 
knowledge and expertise and for answering so   Many of your questions. Remember audience, you 
can download a resource document with links   To information about this particular topic on Please, before we close the Q&A session,   I just want to go back to you, Nikki. Can you 
share some key points that you want the attendees   To remember from today's webinar? Yes. Thank you 
so much. I would like to reiterate that there are   Options to resolve your account if you cannot pay. 
Please ensure that you follow the instructions on   The Letter 38, respond quickly to that letter 
as we stated, there's a follow up within 35   Days. Even if a taxpayer cannot pay in full, there 
will be options. Whether they want to receive an   Installment agreement or if they cannot pay, there 
will be help on the system on to help the   Taxpayer navigate the next best resolution. Okay. 
Those are all your key points. Thank you so much,   Ms. Nikki. I appreciate that. Okay, 
audience, thanks again to Rocco and   To Nikki. They were amazing. Audience, we are 
planning additional webinars throughout the   Year. So to register for an upcoming webinar, 
please visit, keyword search Webinars,   And select the Webinars for Tax Practitioners or 
Webinars for Small Businesses. When appropriate,   We will be offering certificates and CE credits 
for upcoming webinars. We do invite you to visit   Our Video Portal at There you 
can view archived versions of our webinars. Again,   Continuing education credits or certificates 
of completion are not offered if you view an   Archived version of any of our webinars on the IRS 
Video Portal. Another big thank you to Rocco and   Nikki for a great webinar and for sharing their 
expertise. I want to thank you our attendees for   Attending today's webinar, Navigating Through 
the Restart of Automated Collection Notices and   Penalty Relief. If you attended today's webinar 
from the top of the hour and stayed on for at  

Least 50 minutes from the official start time, you 
will receive an IRS certificate of completion that   You could possibly use with your credentialing 
organization for one IRS CE credit. Again,   The time we spent before the webinar started 
doesn't count towards that 50 minutes.   Audience, this is important for you to know, 
certificates of completion will be emailed as   A PDF. It's going to be a PDF attachment. It's 
going to be emailed to the registration email   Address of you as a qualifying participant 
from the email address seen on this screen,   That is Please 
take a moment and add this email address to your   Contacts to ensure you will receive the email 
with your certificate. If you're eligible for   Continuing education from the IRS and registered 
with your valid PTIN, your credit will be posted   In your IRS PTIN account. Remember, audience, 
your first name, last name, and PTIN must match   Exactly with the information on your IRS PTIN 
account. If it does not your IRS CE credit   Will not upload. Then we have to wait for you to 
contact us through our email as seen on this slide   To correct the information. If you are eligible 
for continuing education from the California Tax   Education Council, your credit will be posted to 
your CTEC account as well. If you qualify and have   Not received your certificate and/or credit by 
February 22, please email us, that email again is   If you're 
interested in finding your local stakeholder   Liaison, you may send us an email using 
that same email address shown on the slide,   And we will send you that information. We would 
appreciate it if you would take a few minutes to   Complete a short evaluation before you exit. If 
you'd like to have more sessions like this one,   Let us know. If you have thoughts on how we 
can make them better, please let us know that   As well. If you have any future requests for 
webinar topics or pertinent information you'd   Like to see in an IRS Fact Sheet, Tax Tip, or FAQ 
on, then please include your suggestion   In the comments section of the survey. Click the 
survey button on the right side of your screen to   Begin. If it doesn't show up, please make sure 
you disable that pop-up blocker. It's been a   Pleasure to be here with you today and on behalf 
of the Internal Revenue Service and our speakers,   We would like to thank you for attending 
today's webinar. It's important for the   IRS to stay connected with the tax professional 
community, individuals, tax industry associations,   Along with federal, state, and local government 
organizations. You make our job a lot easier by   Sharing this information that allows for proper 
tax reporting. Thanks again for your time and   Attendance, and we wish you much success in your 
business or practice. You may exit the webinar.

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