If you are still waiting for the IRS to cash your check – you are not alone. During the COVID-19 pandemic, the IRS has furloughed many of its employees, or had them work from home to mitigate the spread of the virus. Many IRS offices remained shuttered for months. A backlog of millions of pieces of unopened mail is still accumulating in trailers set up outside IRS facilities.
This includes unopened mail with payment checks, which creates a problem for many e-filed returns with tax due. This is because the IRS computer shows a tax return filed but no payment made. Since the IRS utilizes a significant amount of automation, its computers are automatically spitting out tax-due notices. Including sending notices to those who had mailed in payments. While most IRS facilities have reopened and IRS employees have returned to work, it will take them weeks, if not months, to get all of the backlogged mail opened and processed. Which is why you may still be waiting for the IRS.
IRS to Display Posted Payments
After receiving complaints from taxpayers and members of Congress, the IRS put information on its website about these outstanding payments. Payments will now be posted the date received by the IRS, not the date when the Service processes them. In most cases, this will eliminate or minimize penalties and interest for late payments. So, if you mailed a check to the IRS that hasn’t yet cleared your bank, don’t cancel or put a stop-payment on the check. However, you should be sure that you have adequate funds in the account from which the check was written. This way the check will be sure to clear when the IRS does process it.
Penalty Relief
Normally, the penalty for a bounced check (dishonored payment) of over $1,250 is 2% of the amount of the payment. If the amount is $1,250 or less, the penalty is the amount payment, or $25, whichever is lower.
To provide fair and equitable treatment during the COVID-19 emergency, the IRS is providing relief from bad-check penalties. The dishonored payment penalty will be waived for dishonored checks that the IRS receives between March 1 and July 15 due to delays in IRS processing. However, interest and other penalties may still apply.
The IRS has also decided to suspend mailing certain tax-due notices to taxpayers temporarily until the unopened mail backlog is cleared up. If you have received a tax-due notice and know that you already paid the tax, WAIT contact the IRS about any unprocessed paper payments.
Still Waiting for The IRS? Patience is a Virtue
So, for now, taxpayers who have uncashed payments need to be patient. Don’t send additional correspondence to the IRS that would just be added to the mountains of unopened mail. And due to high call volumes, phoning the IRS will be of little use at this time.
If you have any further questions, please give us a call at (360) 778-2901.
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