Potential Identity Theft During Original Processing with Online Option, letter is mailed to taxpayers to notify them that the Internal Revenue Service (IRS) received an income tax return using your name, Social Security number (SSN) or individual taxpayer identification number (ITIN).

On Thanksgiving, together with my family, I will pause, reflect, and give thanks for the good in my life, both personally and professionally.

Each year, disasters affect hundreds of thousands of people and businesses. These disasters can upend every aspect of an affected individual’s life, including damage to, or destruction of, their home, business, and critical documents. To assist taxpayers, the president may declare the event a federal disaster, which allows the federal government to help affected taxpayers under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Once this declaration has been made, the IRS will often provide these taxpayers with certain relief, most commonly by exercising its authority under IRC § 7508A to postpone certain tax deadlines, including filing and payment deadlines.

Sadly, devastating wildfires swept through my community in Southern California this past month, destroying homes, schools, businesses, and entire neighborhoods. My heart goes out to all those affected by these tragedies, especially the families that lost so much. And I am profoundly grateful for the tireless efforts of our first responders, whose bravery made a significant impact. I am confident that the community will rebuild, stronger than ever, and support each other on the road to recovery but I recognize it may be a long journey and these impacted individuals need our support.

CP 05 - We're Holding Your Refund

Last month, Congress passed the Inflation Reduction Act (IRA22), which provides the IRS with supplemental funding of nearly $80 billion over the next ten years. The legislation provides about $3.2 billion for taxpayer services, $4.8 billion to modernize the IRS’s information technology (IT) systems, and $25.3 billion to support its taxpayer service and enforcement operations.

The IRS assessed the tax and sent you a bill reflecting a balance on your tax account.

A federal tax lien arises automatically if you don’t pay the amount due after receiving your first bill.

Like many of you, I am looking forward to spending time this holiday season surrounded by family and loved ones. Our to-do lists are long and there is important work to get done, but I hope that all of you get a chance to be present, put away your cell phones, and give thanks for the things that bring you happiness and fulfillment. Maybe it is having a job that you love (like serving as the National Taxpayer Advocate), a new grandbaby or pet, spending time with friends or family, or maybe it’s that you got your tax refund on time!

Filing season kicked off on January 24 this year. Each filing season comes with challenges for taxpayers such as choosing a qualified return preparer, locating a Volunteer Income Tax Assistance (VITA) site , and understanding the issues to address on their tax returns. The Earned Income Tax Credit (EITC) Awareness Day is a one-day national education program to alert taxpayers to the importance of the EITC and teach them how to claim it properly.

In 2017, as required by law, the Internal Revenue Service started using private collection agencies (PCAs) to collect certain overdue federal tax debts. If your federal tax debt is assigned to a PCA, you will receive letters from both the IRS and the agency. These letters contain important information for when you are contacted by the collection agency, so make sure to put them in a safe place.

Since 2020, I have repeatedly recommended a legislative change under which Congress would make foreign information return penalties and assessable penalties subject to deficiency procedures for the benefit of both the IRS and taxpayers.  This change would provide taxpayers with a more efficient, less costly, and more equitable regime governing the initial imposition of these penalties, as well as the mechanisms by which they can be challenged by taxpayers.

As the National Taxpayer Advocate, I am the voice of *all* taxpayers within the IRS. As such, my office assists many different types of taxpayers in resolving tax problems with the IRS. While we typically focus on individual tax issues, our purview also includes business taxpayers. One such class of taxpayers involves marijuana-related businesses. I want to shed some light on the frustrations encountered by a growing segment of the business taxpayer population – the growers, distributors, and retailers of marijuana-related products – and educate them on federal tax law.

The CP05 notice is mailed to taxpayers to notify them that the IRS is holding their refund until the accuracy of the tax credits, income tax withholding or business expenses has been verified.

Taxpayer receives a notice or letter from the IRS and either chooses to respond to the notice or letter by paying their tax balance in full and/or filing missing tax returns; or pursuing a payment option; or the taxpayer chooses not to respond.