IRS Sent You an Unpaid Balance Notice, Even if You Have Already Paid. Here's the Problem
Some American taxpayers receive unpaid balance notices from the Internal Revenue Service even if they have already paid their due.
This should not cause worry immediately. The problem might not be on your part.
House Ways and Means Committee chairman Richard Neal, D-Mass, said that there were 12 million unopened mails in their offices at one point this summer.
Many IRS workers and employees were told to work from home due to the coronavirus pandemic earlier this spring.
This caused the current pile up in their mails.
The correspondence included paper returns and payments remitted to the federal government to pay taxes owed.
IRS workers are now working through the backlog.
With this, taxpayers are only finding out that the check they have sent to the IRS is still in the pile of other unopened emails.
Kathryn Morgan, an enrolled agent at Puzzled by Taxes in Haughton, Louisiana, said they are freaking, and many payments are sitting in tractor-trailer full of mail.
Morgan added that the IRS still has a huge mail backlog.
She said that one of her clients filed his 2019 income tax return online. He chose to send a cashier's check to the IRS.
The bank writing the check said that it had to be used within the 60-day-period. However, the time the agency got the check, it was already expired.
"He had to get another cashier's check and the whole time he's accruing penalties and interest," Morgan was quoted.
Mail Backlog
Lawmakers have urged the IRS to temporarily stop sending notices to the files, which may be caught up in the backlog.
"Instead of sending potentially erroneous notices, [House Ways and Means chairman] Neal suggested the IRS establish an online portal for taxpayers to alert the IRS that they previously had mailed their tax payments," the committee said through a statement.
Neal said that the notices put unnecessary stress on taxpayers. He added that taxpayers should contact the IRS for assistance upon receipt.
The IRS said they know about the backlog and process mailed payments as of the day they were received, rather than the day they were processed.
Taxpayers who had an expired check in the IRS mail backlog will have relief from bad check penalties, as long as the checks were sent on the deadline for the 2019 tax returns and payments.
The deadline was between Mar. 1 and Jul. 15.
IRS Spokesman, Eric Smith, said that interest and penalties may still apply to some institutions, but individuals who file on time will be exempted from that.
The individual taxpayers will be exempted as long as they pay the full amount due and on time.
IRS Issues
Meanwhile, if you have a payment to make and you are worried that it might go missing, electronic payment options are available.
You can consider paying your taxes directly from your checking or savings account, or a same-day wire from your bank.
Electronic Funds Withdrawal can also be made, and the IRS does not charge a fee to use EFW. However, your bank might.
American taxpayers can also pay by debit or credit card or through the Electronic Federal Tax Payment System.
If you are still in doubt, you can contact your tax professional to help you track down your payments.
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