Some of your clients may have found a tax bill when they opened their mailbox this morning. That’s because the Internal Revenue Service began sending CP14 and CP501 Notices to taxpayers who still owe tax for TY 2018.
According to the IRS release, these notices were sent to taxpayers who filed before the deadline but still owed tax. That means recipients might not have known the exact timing, but they were expecting a bill from tax agency.
The IRS insinuated that at least some of the unpaid tax bills could be attributable to the sweeping changes enacted by the Tax Cuts and Jobs Act: “recent major tax law changes affect most taxpayers, and while the vast majority are receiving refunds, others discovered that they owe tax this year.”
To help affected taxpayers, the IRS included links to payment options and—for those who might struggle to pay all the tax owed—resources for setting up a payment plan.
IRS Emphasizing Online Payment Options
While taxpayers can always mail a check or money order, the IRS emphasized the convenience and speed of online methods, like IRS Direct Pay, credit card, IRS2Go, and the Electronic Federal Tax Payment System. When it comes to setting up a payment plan, the IRS says “with the Online Payment Agreement, taxpayers can usually set up a payment plan (including an installment agreement) in a matter of minutes.”
The IRS even suggested that those facing financial hardship should check out the provided Offer in Compromise links, which can help “some struggling taxpayers settle their tax bill for less than the full amount due.” There’s even a “pre-qualifier tool” to help get taxpayers started in the process.
Finally, the IRS issued yet another withholding reminder. Throughout 2018, the agency reminded taxpayers that TCJA-related changes could have affected the amount they needed to withhold from their paycheck every pay period. Those who received a surprise tax bill or penalty for tax year 2018 will probably need to adjust their withholding by filling out another Form W-4. Luckily, the IRS has several withholding resources that can demystify the process: