It’s undeniably been an unusual year, especially when it comes to taxes. With layoffs, furloughs, stimulus checks, unemployment benefits, and postponed tax deadlines, it’s easy to feel overwhelmed. Adding to the complexity, reduced staffing at the IRS due to the pandemic has further complicated matters. In fact, according to a recent CNBC report, the IRS is facing a backlog of roughly 12 million unopened pieces of mail.
Consequently, some individuals have begun receiving intimidating notices regarding unpaid taxes. While receiving a government notice with late penalties and interest charges can be distressing, there’s no need to panic just yet. It’s highly likely that it’s a mistake, unless, of course, you genuinely missed the tax filing deadline or have outstanding taxes to pay. In that case, this article won’t offer much solace.
However, if you’ve already sent your payment to the IRS and still received an unpaid notice, remain composed. It’s probable that they simply haven’t processed your mail yet, and the automated billing system erroneously generated a notice that isn’t warranted.
What Should You Do About It?
Here’s some reassuring news: the issue should soon be resolved. The government has directed the IRS to temporarily halt the issuance of these automated notices.
“The IRS should refrain from sending notices to taxpayers until the backlog has been brought down to pre-pandemic levels and taxpayer accounts have been updated,” stated Richard Neal, the House Ways and Means Committee Chairman.
If you’ve previously submitted a payment by mail and still received an unpaid notice, chances are everything is in order. Nonetheless, it’s prudent to take a few steps to ensure everything is squared away. Firstly, review your own records to confirm the amount you paid. Then, compare this figure to the notice you received. If the numbers align, you’re likely in the clear. The IRS will eventually process your mailed payment.
Here’s another tip: if you mailed your payment using certified mail (which is always advisable for tax payments), you can verify precisely when (or if) the IRS received your payment. As long as the certified mail was delivered to the IRS by July 15, you won’t incur any late penalties, regardless of what the unpaid notice may indicate.
Expired Payments?
Unfortunately, here’s some less-than-ideal news: many commonly used forms of tax bill payments, such as cashier’s checks or money orders, come with expiration dates. If your money order happens to be buried within a stack of unopened mail, the IRS might encounter difficulties processing it once they eventually unearth it. This poses a significant issue.
However, it’s advisable not to take overly proactive measures. The IRS cautions against canceling the original money order or check and issuing a new one. Instead, the IRS will likely attempt to process your initial payment, and if it fails, you might incur a fee. If you’re concerned about facing this situation, you can try reaching out to the IRS during their regular business hours. Expect some wait time to speak with a live representative, but they should be able to provide guidance on your next steps.
Make It Easy On Yourself
If you find yourself in this situation in 2020, it’s a matter of weathering the storm. It’s an extraordinary year for everyone, including the IRS staff who are diligently working to handle everyone’s returns. However, let’s face it—mailing a check to the IRS is an outdated method of tax payment.
You don’t require an elaborate or pricey technological arrangement to file your taxes and make payments online. The majority of financial institutions offer convenient options for paying the IRS, akin to settling your utility bills. Additionally, you can wire your payment, bypassing the need to wait for weeks (or even months) for your check to clear.
In Conclusion
Dealing with taxes can indeed be perplexing and anxiety-inducing. However, don’t let an unpaid notice throw your life off course. Firstly, verify its authenticity. Then, confirm that you did, in fact, send your payment by the deadline. It’s a given, but if you haven’t settled your outstanding taxes yet, that’s a task you’ll need to prioritize. If you’re facing financial difficulties due to the pandemic, there’s a possibility the IRS may grant you an extension. However, it’s important to note that they won’t simply waive the debt.
When you file your 2020 taxes next spring, opt for electronic payments. Doing so will spare you considerable time and frustration in the event of an unexpected backlog at the IRS.