A number of tax professionals had been reporting in early February that clients had been receiving notices from the IRS that the agency did not show that they had filed a 2019 tax return. In such cases a return had been filed, with most reporting the return had been filed electronically and accepted by the IRS.

The IRS has now come forward with a release on their website[1] that indicates that these erroneous notices should be ignored if a taxpayer actually filed their 2019 tax return.

The web page states:

Earlier this month, the IRS issued notices to approximately 260,000 taxpayers stating they haven’t filed their 2019 federal tax return. These notices, referred to as CP59 notices, are issued yearly to identified taxpayers who have failed to file a tax return that was due the prior calendar year (Tax Year 2019). Due to pandemic related shutdowns, the IRS has not completed processing all 2019 returns at this time. Therefore, the CP59 notices should not have been sent because some portion of the recipients may actually have filed a return that is still being processed. People who filed their 2019 return but nevertheless received the CP59 notice, can disregard the letter and do not need to take any action. There is no need to call or respond to the CP59 notice because the IRS continues to process 2019 tax returns as quickly as possible. The IRS regrets any confusion caused by this mailing.[2]

While useful to know, actually following the IRS advice poses a risk unless the agency remails any of the 260,000 letters where the agency still doesn’t find a record of the return after processing the backlog. The IRS notice does not commit to taking that action. This could pose a risk to taxpayers where the agency has truly lost track of their 2019 return, since now it could easily appear to the IRS systems that the taxpayer had ignored a notice and failed to cooperate.

So, unfortunately, prudence suggests at least following up with a response to the notice. Presumably following up by citing the website information, pointing out that the taxpayer has records showing the return was filed and accepted, and asking the agency to contact the taxpayer if the agency does not believe this taxpayer is in the “no need to contact us” group may help keep the taxpayer from being treated as “nonresponsive” down the line if the agency has truly misplaced the documents.

[1] “IRS Statement about CP59 notices,” IRS website, February 18, 2021, https://www.irs.gov/newsroom/irs-statement-about-cp59-notices#:~:text=Earlier%20this%20month%2C%20the%20IRS,year%20(Tax%20Year%202019) (retrieved February 20, 2021)

[2] “IRS Statement about CP59 notices,” IRS website, February 18, 2021