One would think that the IRS would learn from its mistakes. One would be wrong (at least, in this case). Back in November 2020 I wrote a post titled, “IRS Mailing Erroneous CP259F Notices.” That post dealt with taxpayers who filed split-interest trust returns (Form 5227) timely and received notices stating they had not filed those returns. And as Yogi Berra would say, it’s deja vu all over again.
Yes, the IRS sent those same notices out this year. Yes, the returns have been filed and are sitting in bins somewhere in Ogden, Utah waiting to be processed. Yes, you should not respond to those notices and send a second copy of your Form 5227 to the IRS. (Normally, you should always respond to IRS notices but this is an exception.) As the IRS said last year, (a) if you send a second return it could be processed before the first return (causing another set of issues), and (b) sooner or later the backlog will be cleared. (Note: If you didn’t file your Form 5227, you should, of course, respond to this notice.)
As I said last year, this faux pas is another reason why using certified mail is essential when sending anything to a tax agency. With the volume of paper waiting to be processed, it’s inevitable that something is going to be lost. (Not to mention the report that the IRS “helpfully” destroyed 30 million documents in March 2021.) If you have your certified mail receipt that will hold up as proof of filing.
I am going to add some parting remarks to the IRS. As I just told a client, “This is incredibly stupid. The IRS was made aware of this issue last year and obviously did nothing. This will cause even more phone calls to the IRS (you currently have a 3% chance of reaching a human if you call the IRS), and more mail sitting in trailers. The IRS should have turned off the automatic generating of these notices.”
Tags: 2021.Tax.Season, charitable.remainder.trusts, Form.5227