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Covid-19 Delays IRS in Processing 2019 Tax Payments – What to do if you receive an IRS Notice.

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With the Covid-19 pandemic causing major shutdowns and delays across the country, the IRS is still getting up to speed in processing taxpayers 2019 tax due payments for individuals and trusts. The IRS is receiving millions of pieces of mail each day and processing backlogs have swelled, creating a problem for taxpayers (including trusts) that mailed their 2019 tax due or extension payments by check. At the moment, many taxpayers are receiving IRS notices about payment discrepancies on their account, which are typically the result of un-cashed checks. The IRS is aware of the issue and is working to put a stop to these notices and has advised taxpayers to be patient and not place a stop payment order on any checks until further guidance is issued this fall.

So what should you do if you receive a notice from the IRS?

  • Provide the notice immediately to your representative here at Berntson Porter and we can help reply to the notice, either by a written reply to the IRS or by phone.
  • Do not ignore IRS notices. Notices typically start with a “balance due” letter and if not addressed timely can result in further notices including filing of a federal tax lien or a notice of statutory deficiency, which can start the long process of the IRS moving into collections.
  • Prepare documentation to show that your payment was timely mailed. This could include a copy of a certified mail receipt, a note from your checkbook showing the payment was made, and any relevant bank statements showing your check has not yet been cashed.
  • Due to high call volumes, a phone call to the IRS at the number listed on the notice may not be practical at this time. Request assistance from your tax professional here at Berntson Porter to help call the IRS on your behalf and request a “hold” be placed on your account.
  • With millions of pieces of mail being sent to IRS offices daily, there is also a compelling reason to make tax due payments and estimated tax payments electronically. Below are two options for taxpayers to make payments electronically to the IRS and a new option to e-file certain amended tax returns.

How to make payments to the IRS electronically

Another option for taxpayers is to make payments electronically to the IRS using the IRS secure website IRS Direct Pay or Electronic Federal Tax Payments System® EFTPS. One clear benefit to making tax payments (including estimated tax payments) electronically is having an immediate confirmation of payment and proof of payment in the event the IRS later questions if a payment was timely made. No more lost checks and standing in line at the Post-Office!

E-Filing Amended Returns

The IRS also announced a few weeks ago, in a move cheered by the tax community, that the Service will now be offering the ability for taxpayers to e-file amended tax returns for 2019 year Forms 1040 and 1040-SR, and plans to offer more forms in the future. The ability to e-file amended tax returns will allow taxpayers and their advisors to make changes to prior year filings quickly and efficiently, as paper filed amended returns could take anywhere from 4-16 weeks to be fully processed by the IRS.

If you receive a notice from the IRS and would like help in a response, please reach out to your team here at Berntson Porter, we are here to help!

Berntson Porter is here to help businesses navigate these unprecedented times. Visit our Resource Center for up-to-date information about COVID-19 legislation that impacts you and your business.