IRS Systemic Issues: Important Updates

for Taxpayers

Professional associations, including the AICPA, have reported several systemic issues within the IRS that may affect taxpayers. Although the IRS is aware of these problems and has begun implementing fixes, some incorrect notices continue to be issued. Below are highlights of the issues that are being monitored.

Erroneous Notices for Trusts (Form 1041)

Trust taxpayers are receiving CP134B notices with incorrect interest charges and misapplied overpayments. In addition, an e-filing issue has been identified with Form 1041-T (Allocation of Estimated Tax Payments to Beneficiaries), which can prevent Form 1041 from being electronically filed.

Incorrect Penalties on Form 3520

Some taxpayers have received penalty notices on Form 3520 (Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts), despite having filed correctly and on time.

CP59SN Notices Despite Extensions

Taxpayers are receiving CP59SN notices (failure to file) even though their returns were validly extended to October 15, 2025. This has been confirmed as a nationwide issue.

What This Means for You

If you receive any of these notices, do not panic. Many are being issued in error. Contact our office immediately so we can review the notice, confirm whether action is required, and, if necessary, work with the IRS on your behalf.

We will continue to monitor these issues closely and provide updates as new guidance becomes available. As always, please reach out to our office at (281) 491-8866 if you have questions or concerns about any IRS correspondence you receive.

GRIFFING & COMPANY, P.C.

(281) 491-8866 Fax (281) 491-8998

info@griffing.com

www.griffing.com