Are you concerned about an IRS payment that has not cleared your account yet or have you received an amount due notice from the IRS – You are not alone!

With the shutdown of the Internal Revenue Service earlier this year in response to COVID-19, items mailed to the IRS went unopened for a few months, resulting in a significant mail backlog when the IRS recently started reopening its operations. This IRS backlog not only included correspondence, but also paper-filed returns and various tax payments. Some tax payments were processed through this time, others remain in the backlog.

Delayed notices and erroneous taxes due notices

The IRS has made a few missteps during this time. First, the notices that were processed around the time of the shutdown were mailed out when the IRS reopened. The IRS acknowledge this by including an insert in the mailings, rather than tossing them and starting over. Unfortunately, the IRS did not learn from the confusion and angst this caused, and recently started sending out computer-generated taxes due notices for some electronically filed returns containing amounts due – and those amounts due were somewhere in the IRS backlog!

Did you receive a notice that you should not have?

If you were one of the unfortunate taxpayers who received a notice but timely mailed in the taxes due, please contact us today with a copy of your notice and the details of your payment. The IRS is now recommending that taxpayers who have not yet responded to notice CP14 promptly respond to it. A phone follow-up would be the best way to accomplish this, as sending correspondence will only add to the IRS’ mail backlog.

Did you make a tax payment that hasn’t yet cleared?

If you have made a tax payment that has not yet cleared your bank and you have not received a tax due notice from the IRS, it is recommended that you wait for the backlog to be processed. You should not cancel your previous payment and reissue it. The IRS will process and post your payment on the date it was received, rather than processed, so late payment penalties and interest should be removed from your account at that time. If you cancel your payment or funds are not available in your account when the payment is processed, you may lose this protection and end up with late payment penalties.

Current suspended tax due follow-up notices as a result of the IRS backlog

For now, the IRS has indicated that it will suspend the mailing of three types of tax due follow-up notices – CP501, CP503, and CP504 – to help reduce confusion for taxpayers that have sent in their payments, until the mail backlog is reduced to a manageable level. However, it is still possible that taxpayers will still receive notices of payments due as existing mailings make their way through the system. If you receive a notice, please contact your Chortek professional for assistance.