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IRS Notices on Payments Not Yet Processed

Kathie Gedde

August 19, 2020

A number of taxpayers report receiving notices showing balances due for 2019 returns, along with penalties and interest, for payments they mailed to the IRS some time ago.  This is especially occurring with individual taxpayers filing Forms 1040 and fiduciary taxpayers filing Forms 1041.

Due to the Coronavirus shutdown, millions of pieces of mail went unopened during the IRS’s period of shutdown.  The IRS is bringing its staff back and has started tackling the massive project of opening all their mail, but the process is a slow one.

The IRS updated its website on August 14th with the following:

Pending Check Payments and Payment Notices: If a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog of mail the IRS is processing due to COVID-19. Any payments will be posted as the date we received them rather than the date the agency processed them. To avoid penalties and interest, taxpayers should not cancel their checks and should ensure funds continue to be available so the IRS can process them. To provide fair and equitable treatment, the IRS is providing relief from bad check penalties for dishonored checks the agency received between March 1 and July 15 due to delays in this IRS processing. However, interest and penalties may still apply. Due to high call volumes, the IRS suggests waiting to contact the agency about any unprocessed paper payments still pending.

If you receive a notice showing a payment due, you should review your bank account to determine whether the check has been cashed.  If it has been cashed, it is likely that the notice was sent prior to the payment being posted to your account.

If the check has not cleared your account, your safest approach is to call the IRS at the phone number listed on the notice to notify them that your check was mailed, the date it was mailed, and ask for a hold to be placed on your account until the payment is recorded on their system.  Be aware that they are likely experiencing high call volume related to this issue, so you may have a substantial wait to speak with a representative.  Alternatively, you can sit tight and wait to see if you receive another notice, once the IRS has theoretically had time to process your payment.  If you choose the latter option, please be sure to let us know if you do receive a second notice so we can follow up.

Your team at SGA is here to help at 541-388-7888, so let us know if we can be of assistance!

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