IRS Changes
IRS Sending CP Notices to California residents
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As most residents of California know, the IRS and FTB, originally based on FEMA Declarations and then petitions by Representatives of Congress, extended the deadline for both filing and paying of taxes for 2023 until 16 November. The last extension came on the original due date of 16 October 2023 when the IRS Commissioner honored a request to extend until 16 November to give the residents involved in the Camp Fire (2018) time to see if legislation was going to pass to make the Attorney Fees not subject to double taxation.
No movement happened on Capital Hill and so those Attorney Fees, along with other parts of your Camp Fire Settlement taxable to the taxpayer.
The IRS in June started sending out Demand Notices (CPXXX) and continued to do so until late December.
Why Am I Getting a Notice?
Most residents received a notice again in November since the Commissioner only extended the deadline to file and pay one more time on the day of the Current Deadline (16 Oct). As such the IRS computers sent out demand notices. We were told by IRS agents in June that they could be ignored and the IRS systems would correct themselves based on the zip codes of a given individual filing their returns.
GOOD NEWS UPDATE - IRS SENDING ZERO BALANCE NOTICES NOW
As of the last week in December, the IRS systems have seemed to resolve the issue and they are now sending out Zero Balance notices to folks that have previously received a demand notice. If you get this, it means your account is clear and you do not owe any penalties and interest based on the IRS processing through your return based on the FEMA qualifiers. The zero dollar is all contingent on you, the taxpayer, having paid any amount owed at the time of filing.
What to do if I am still getting a notice?
We had a client come to us last week of December that got a new demand notice. Jointly we called the IRS (on the day the IRS computers shut down for maintenance and it was determined that the IRS had their zip code living in Shasta County as their zip code straddles two counties. If you encounter this, call the IRS phone number on the demand notice and get them to fix the 'triggers' that are causing you to get the notice by putting you in the correct county.