Like everything else, when the stay-at-home orders were issued back in March, the IRS ceased operations and sent most employees home. In June, IRS employees began returning to their office to deal with the mountain of paperwork awaiting them.
This means that normal processing time expectations do not apply this year. If you have a balance due to the IRS, you sent them a check and it has not cleared your bank – have patience. Do NOT stop payment on your check because when the IRS processes the check – the check will be considered to have insufficient funds, and THEN the IRS will treat the payment as late and likely assess penalties and interest.
The delay in IRS cashing your check is most likely due to the fact that the check was sent to an IRS Service Center that was closed between March 13 – June 30. These IRS Service Centers receive about a million pieces of mail per week which means there was a backlog of about 16 million pieces of mail – all left unopened. The IRS expects it will take another month or two for them to catch up on depositing checks.
While processing the mail and depositing checks have been greatly impacted, the IRS’ collection billing system is fully automated, therefore it has been sending even more billing notices than normal.
If you receive a notice the collection process will continue. You have the following options.
- An IRS employee deposits your check and credits it to your account (as of the date it was sent). Once the check is deposited, as long as the check was postmarked by 7/15/20, the IRS will remove all late penalties – no penalty abatement request is needed.
- You can call and speak to an IRS representative and ask them to delay collection activity until they process your check.
Thus, you have a choice: wait until the next billing notice arrives (hopefully it doesn’t) or call the phone number in the top right-hand corner of the letter you received.
Remember – do not cancel your check and reissue a new one.
Be forewarned, the IRS is receiving many calls because many balance due notices have already be sent, therefore you should expect lengthy hold times. So, try to be patient and understanding – life is too short to argue with the IRS (let your CPA do it).
Please reach out to your RINA tax professional with any questions or concerns.