IRS - Guidance from Yeo & Yeo
Blog

IRS Acknowledges Delay in Payment Processing – Do Not Cancel Checks

CPAs & Advisors


Print Friendly, PDF & Email

Numerous taxpayers who made tax payments well in advance of the July 15 deadline are finding that their checks have not yet cleared and many have received notices indicating a balance is still due.

The IRS recently acknowledged that the agency is behind in processing items mailed and that includes certain tax payments that could be in the backlog of unopened mail at IRS service centers. The IRS has updated guidance on its website to provide relief for taxpayers with uncashed checks and possibly checks that result in being dishonored by their bank:

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. See www.irs.gov/payments for options to make payments other than by mail.

If you made your payment on or before July 15 and received a notice, or your check has still not cleared, do not cancel your original check or send a second check to pay the balance due with the notice. The agency is working to catch up on the backlog and is ensuring payments will be posted the date received with no penalties applied provided payment was filed on time (by July 15) and payment was made in full. The IRS asks for patience and to refrain from contacting the agency at this time.

In the future, you can help the IRS process payments more efficiently by making your payments one of the following ways:

  1. Make your payments electronically through IRS Direct Pay for Individuals or the Electronic Federal Tax Payment System (EFTPS) for other taxpayers.
  2. Have your balance due and estimated tax payments initiated electronically through ACH debit when you file your return.

If you must pay by check:

  • Make sure to include your SSN (or EIN) on the check, the tax year, and the form number.
  • Send check payments certified mail with return receipt requested to document timely payment.

For more information on this and IRS operations during COVID-19, please visit the IRS website at: https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue

Want To Learn More?

Connect with one of our professionals today.