In light of the COVID-19 pandemic, the world has slowed down and so has the processing of tax returns at the Internal Revenue Service (IRS) due to reduced staffing. The IRS originally published notice at the end of August regarding the impact on IRS processing and continues to update it as needed. Here we outline things to keep in mind given the latest updated notice from the IRS.
IRS Notice Mailings
- When the IRS began mailing backlogged letters and notices to taxpayers in an effort to normal operations, many of the notices were mailed with past due payment or response dates. As of now, the IRS does not intend to generate a new, revised notice. As an alternative, the IRS is planning to send Notice 1052, Important! You Have More Time to Make Your Payment, which will provide a new, updated pay or response date. If you have questions on the notice, visit IRS.gov/coronavirus for more information.
- The IRS suspended the mailing of three notices – the CP501, the CP503, and the CP504 – that go to taxpayers who have a balance due on their taxes. This was done given the backlog of unopened mail and the effort to minimize any possible confusion that might be associated with delays in processing correspondence received from taxpayers.
For returns mailed by or on December 31, 2020, the IRS is accepting the temporary use of electronic signatures for certain forms that cannot be filed electronically.
For any mailed tax returns and other correspondence to the IRS, you should expect to wait longer than usual for a response due to reduced staffing in mailing processing functions. Rest assured, the IRS is receiving mail, but its ability to correspond with taxpayers about a variety of issues including requests for information needed to process a tax return remains limited.
Payments to the IRS
If you have mailed a check with or without a tax return to the IRS, there is a possibility it is still unopened in the mail backlog. Any payments received by the IRS will be posted as the date it was received not the date the IRS processed them. It is imperative you do not cancel these checks to avoid penalties and interest and you should ensure funds will be available when the IRS can process them. The IRS did provide relief from bad check penalties for dishonored checks received between March 1 and July 15, although interest and penalties may still apply. Visit www.irs.gov/payments for options to make payments other than by mail.
The IRS is working on reducing its backlog of third-party authorizations. Due to site closures relating to the COVID-19 pandemic, the IRS continues to exceed its five-business day target for approval. The current time frame for authorization approval is approximately 15 business days. The IRS requests you do not submit duplicate authorizations as that will only likely cause further delays.
If you have questions regarding your correspondence with the IRS and are not getting a response from the IRS, we are happy to see if we can help. For additional information and to speak with one of our tax accountants, please call us at 630.954.1400 or click here to contact us. We look forward to speaking with you.