Here’s what to do if you receive a ‘missing tax return’ notice from the IRS

The IRS has warned about “challenges” this tax season, and a slew of automated notices are already causing distress for filers.

Some taxpayers who sent last year’s return and paid their balance have received a CP80 notice saying they may lose their credit for payment if they don’t file their 2020 tax return.

However, the agency said many of these notices are because of their backlog of unprocessed returns.

“We have already decided to suspend notices in situations where we have credited taxpayers for payments but have no record of the tax return being filed,” the IRS said in a statement. “In many situations, the tax return may be part of our current paper tax inventory and simply hasn’t been processed.” 

But these notices have already alarmed recipients, experts say.

“Before Covid, we very rarely saw these notices,” said John Sessa, a Bloomfield, New Jersey-based CPA at the firm in his name. “I’ve had two clients get one in the past week.” 

While the computer-generated letter asks you to refile, the agency’s website now says explicitly not to resubmit 2020 returns. 

“I would not refile,” said Sessa. “That’s just going to cause more of a delay.”

However, you’ll want to double-check the credit details are accurate, and there are records of filing the return, along with proof of payment. 

You can confirm the IRS received your payment or return, by downloading free IRS transcripts from your online account.

While an account transcript will show payments, the return transcript should show the filing receipt, even if it hasn’t been processed.

A decade of budget cuts, sweeping tax law changes, additional duties and pandemic shutdowns sparked tax return delays in 2021.

“There’s still a massive backlog of paper,” said certified financial planner Sharif Muhammad, founder and CEO of Unlimited Financial Services in Somerset, New Jersey.

Indeed, there were 6 million unprocessed individual tax returns as of Dec. 31, according to the IRS. However, the agency this week reassigned 1,200 workers to tackle the backlog. 

While there are fewer employees for issues, some experts still suggest contacting the IRS to resolve CP80 notices about missing tax returns.

“It’s imperative to get on the phone with the IRS,” Muhammad said. “And I know that’s an undertaking because you could sit for two hours.” 

However, once you reach an agent, he suggests explaining you already filed and faxing over confirmations, such as Form 9325 for electronic filings or your paper trail of return receipts from certified mail, since the agency doesn’t accept email.  

“I will fax something to them while we’re on the phone, wait for them to receive it and ask them to make note on the file,” he said. 

If you can’t reach someone by phone, you may contact the Taxpayer Advocate Service or make an appointment with your local IRS office, Muhammad suggested, but these places may also be delayed.

“The worst thing you can do is ignore something or assume it’s a mistake,” he added. “I’ve just learned over the years that it’s better to have your ducks in a row.”

Did you receive a CP80 notice about a missing tax return? If so, I would love to speak with you for a story. Please email me at [email protected].