Why You Shouldn’t Panic Over an IRS Late Notice

Asset Protection Group | Sep 15, 2020

Normally, we all file and pay our taxes in the spring. Then by summer or early fall, the IRS begins to send out late notices. This makes sense if you truly forgot to pay your taxes… But this year, many taxpayers who did file on time are receiving those scary letters in the mail. Here’s why you shouldn’t panic if you do receive one.

When the economy shut down and offices closed in March, IRS employees went home just like the rest of us. But their mail continued to pile up in offices across the country, and as of this summer 11 million envelopes had yet to be opened. Many of those envelopes contained tax returns and payments that had been sent by the July 15 deadline.

Then, automated letters, notifying taxpayers of late returns and absent payments, began to go out. If you receive one of these notices despite mailing your payment months ago, it’s probably because your tax return has not yet been opened and processed.

Luckily, the IRS is aware of this problem and has instituted policies to help, such as:

  • Those who mailed their returns and payments by July 15 will have their late penalties waived
  • Those who used certified mail can provide a tracking number to the IRS, and prove the time of their filing
  • If your check is deposited and processed, simply provide a copy of the certified check to the IRS to show payment

If you used a tax professional to file your return, contact them if you receive a late payment notice in the mail. Otherwise you can call the IRS yourself to discuss the situation.

If you sent payment by check, but it still has not been processed, resist the urge to cancel the check. When the IRS does find it and deposit it, you could be charged a bad check fee.

Those who paid by money order might be asked to send a new one. Most money orders do expire in 60 days, so they won’t process if deposited after that time period has elapsed.

In general, simply exercise patience and be proactive about contacting the IRS if you do receive a late payment notice. The proposed penalty might look scary, but those who did send payment on time can rest assured the situation will be remedied once the payment is located.