Breaking News - IRS Mail Backlog and Unprocessed Checks, August 21, 2020

The IRS Stakeholder Liaison reports that IRS has been receiving a large number of inquiries about checks being sent and not cashed, and has posted the following notice to its IRS Operations During COVID-19 page:

Pending Check Payments and Payment Notices

If a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog of mail IRS is processing due to COVID-19. Any payments will be posted as the date received rather than the date the agency processed them. To avoid penalties and interest, taxpayers should not cancel their checks and should ensure funds continue to be available so IRS can process them.

IRS is providing relief from bad check penalties for dishonored checks the agency received between March 1 and July 15 due to delays in IRS processing. However, interest and penalties may still apply.

Due to high call volumes, IRS suggests waiting to contact the agency about any unprocessed paper payments still pending.

Balance Due Follow-Up Notices Temporarily Halted

IRS has temporarily suspended the mailing of CP501, CP503 and CP504 notices to taxpayers who have a balance due on their taxes, while it reduces the backlog of unopened mail that developed when operations were closed due to COVID-19. IRS is taking this step to avoid confusion for taxpayers who previously received a CP14 balance due notice and mailed a payment to IRS, but whose payment may still be unopened.

The CP501, CP503 and CP504 follow-up notices are typically automatically sent to taxpayers who do not respond to the CP14. IRS will continue to assess the mail inventory to determine when to resume the follow-up notices. However, taxpayers who have received but not yet responded to a CP14 balance due notice are encouraged to promptly respond.

As IRS works to stop these mailings at processing centers, some taxpayers and tax professionals may still receive these notices during the next few weeks due to delivery of existing mailings. Read more here.