by Gregory S. Dowell

August 21, 2020

We continue to hear from a number of clients that the IRS has not cashed the checks that were mailed along with the payment vouchers. We’ve also been hearing that paper returns have not been processed by the IRS, despite the fact that they were mailed in months ago.

Last Thursday, the IRS acknowledged the backlog that has occurred, caused by the pandemic. The IRS has confirmed that checks it has received will be posted based on the date the checks were received by the IRS, rather than on the date the IRS processes the check. Taxpayers are urged not to put stop payments on their checks, as this will only add further delays. At the same time, the IRS indicates that it will provide relief from bad check penalties for dishonored checks that it received between March 1st and July 15th of this year.

The IRS indicates it has begun mailing a backlog of letters and notices to taxpayers. As might be expected, many of those letters and notices include payment dates and response dates that have already passed or will be impossible to meet. Rather than generating new corrected notices, the IRS is including an insert titled “Important! You Have More Time to Make Your Payment.”, which goes on to provide the updated payment or response date.

While these glitches are understandable to some degree, given the chaos that ensued with the shutdown of the IRS offices, our advice is that taxpayers should be sure to timely respond to all notices received, and keep copies of all notices and responses made. Understanding the delays in processing that have occurred, we would hesitate to have any client put a stop payment on a check, without more specific and definitive information on the circumstances.