Taxpayer Filed 2020 Tax Return; Receives IRS Notice that Return Not Filed

According to recent reports, the IRS has a backlog of more than 6 million unprocessed individual returns; however, it has opened most 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 hasn’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 that taxpayers should not 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.”

In addition to the CP-80 notice, some taxpayers have received failure to file notices resulting in penalties and liens. In some cases, payments to the IRS were returned to the taxpayer.

We’ve reached out to our IRS liaison to find out what taxpayers and tax professionals should do if they’ve received a notice. We’ll be in communication with you when we receive additional guidance.