IRS Pauses Automated Collection Notices During Filing Season
The IRS has temporarily paused select automated collection notices during the 2025 tax season as the agency prioritizes processing tax returns and issuing tax refunds. The change delays some reminder letters related to unpaid tax debt, but taxpayers should not assume their balance has been resolved. Interest, penalties, and other late-payment penalties generally continue until the balance is paid.
During the busiest weeks of tax season, the Treasury Department and the Internal Revenue Service must process millions of Form 1040 filings, business returns such as Form 1120 and Form 1041, and submissions from tax-exempt organizations, including Form 990-T. At the same time, the agency handles tax refunds, payment postings, and adjustments tied to unprocessed tax returns.
To prevent confusion during this heavy workload, the IRS has paused certain automated collection notices generated through the Automated Collection System. These automated reminders typically appear when an account still shows a tax debt after the first balance due notices have been issued.
The temporary pause does not eliminate collection activity or cancel the tax debt. Instead, it delays some follow-up reminder letters that would normally be triggered through the IRS notice process.
Taxpayers who owe federal taxes generally receive balance-due notices as part of the IRS collection process. The process usually begins with an initial notice explaining the amount owed and requesting payment.
If the balance remains unresolved, the system may generate additional automated reminders, such as CP500 collection letters or a special reminder letter sometimes labeled LT38 – Reminder. These letters warn that enforcement actions could follow if the balance remains unpaid.
Under the current pause, the IRS may still send the earliest balance due notices while temporarily delaying later automated reminders.
The IRS handles large volumes of account updates during tax season. Payments may arrive while a taxpayer is filing a new tax return, or a return may correct an earlier balance due.
In some cases, automated collection notices are generated before those updates appear in the system. This can lead to duplicate correspondence or letters arriving after a payment has already been submitted.
The Automated Collection System may generate a reminder letter before the IRS records a payment or processes a recently filed return. This situation became common during the COVID-19 pandemic when large numbers of unprocessed tax returns accumulated.
Taxpayers sometimes received notices such as CP80—Unfiled Tax Return, or follow-up letters such as CP516 and CP616, even though they had already filed or paid. Pausing automated collection notices during filing season gives processing systems time to catch up and reduces the likelihood of sending incorrect reminder letters.
A pause in automated collection notices does not eliminate tax debt. Taxpayers who owe money remain responsible for resolving the balance.
Interest and penalties generally continue to accrue until the account is paid in full. This includes late-payment penalties and the failure-to-pay penalty that applies when a taxpayer does not resolve the balance on time.
In some cases, the failure-to-file penalty may also apply if a taxpayer fails to file required returns. These costly IRS penalties can significantly increase the total balance owed.
If a tax debt remains unresolved, the collection process can continue once automated reminders restart. Enforcement actions could eventually include levy notices, wage garnishments through programs such as the Federal Payment Levy Program, or property seizures in extreme cases.
Forms such as Form 668-W may be issued to employers in wage levy situations. Revenue officers may also become involved when accounts require direct enforcement review.
The IRS collection system includes several stages before reaching those steps, including reminder letters and other collection notices designed to encourage voluntary payment.
Taxpayers who cannot pay their entire balance immediately still have several options to resolve their accounts. One common option is a payment plan through the online installment payment application.
An installment agreement allows individuals to pay their balance in installments rather than paying the full amount at once. These arrangements can help prevent enforcement actions while the debt is being repaid.
In addition to installment agreements, taxpayers may qualify for other collection alternative programs. One possibility is an offer in compromise, which allows certain taxpayers to settle their tax debt for less than the full amount owed if they meet strict eligibility requirements.
Another option is the currently not collectible status. When a taxpayer demonstrates financial hardship under Collection Financial Standards, the IRS may temporarily delay collection activity.
Taxpayers can also request a Collection Due Process hearing using Form 12153 if they disagree with certain collection actions. During that process, a settlement officer reviews the account and may issue a notice of determination.
Taxpayers facing complex collection notices may consult a tax professional, such as an enrolled agent or a certified public accountant. Organizations, including the American Institute of Certified Public Accountants and the New York State Society of Enrolled Agents, provide continuing education and guidance on IRS procedures.
The Taxpayer Advocate Service also helps individuals facing financial hardship or administrative problems. The independent Taxpayer Advocate and affiliated low-income taxpayer clinics can assist taxpayers who are struggling to navigate the system.
If disputes escalate, some matters may proceed to the Tax Court or involve a review of the assessment statute expiration date and other legal deadlines.
Tax professionals often advise taxpayers to file the current year's tax return before addressing older tax debt issues. Before requesting a payment plan or other collection alternative, filing ensures compliance and enables the IRS to update account records.
Once the return is processed, taxpayers can review their account balance, confirm whether tax refunds or refund offsets apply, and determine the best strategy to resolve the remaining balance.
Monitoring IRS resources, including guidance available through the IRS Video Portal and educational materials used in revenue agent training, can also help taxpayers better understand the notice process and their rights.
By William Mc Lee, Editor-in-Chief & Tax Expert—Get Tax Relief Now