Spidell is aware of erroneous notices CP161, Notice of Balance Due, and CP504B, Notice of Intent to Levy, issued by the IRS. According to one IRS stakeholder liaison we have spoken with, as of right now these erroneous notices are impacting taxpayers filing Form 1041 and the Form 1120 series. The IRS is working on this issue and is planning an external communication on the issue soon.
We recommend that taxpayers who receive either a CP161 or CP504B in error call the IRS and request a hold on collection activities. When calling the IRS, reference “SERP Alert 25A0128” issued on May 2, 2025. That alert indicated that the IRS’s estimated tax penalty system incorrectly calculated penalties for many taxpayers.
We will send another Flash E-mail as soon as the IRS has issued its official communication on the matter.
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