IRS is Sending Compliance Letters to Non-Filers

IRS is launching a new compliance effort focused on high-income taxpayers who have failed to file federal income tax returns. IRS is mailing more than 250,000 compliance alert letters, formally known as the CP-59 notice.

This mailing includes 25,000 letters to those with more than $1 million in income, and 100,000 to people with incomes between $400,000 and $1 million, between tax years 2017 and 2021. Approximately 20,000 to 40,000 CP-59 notices will be mailed each week, beginning with filers in the highest income categories.

Some of these non-filers have multiple years included in the case count, so the number of taxpayers receiving letters will be smaller than the actual number of notices mailed. Recipients of these notices should take immediate action to avoid additional follow-up notices, higher penalties, and increasingly stronger enforcement measures.

FS-2024-06 explains what taxpayers can expect upon receiving a CP-59 notice, and what to do to resolve it. It also explains the steps IRS may take if a letter recipient fails to respond and doesn’t file. This may include IRS creating a substitute tax return for the taxpayer based on wages and other income reported to the agency by employers, financial institutions, and others.