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IRS responds to member inquiry on balance-due notices

Written on Aug 22, 2020

UPDATE: IRS TEMPORARILY STOPS MAILING NOTICES TO TAXPAYERS WITH BALANCES DUE

OSCPA staff report

The IRS on Aug. 19 responded to an OSCPA member’s inquiry about the flurry of notices some clients of CPAs have been receiving showing balances due on 2019 returns.

“The first few notices our clients received, we responded with letters,” the member wrote in an email to OSCPA Tax Policy Director Greg Saul, Esq., CAE. “It soon became obvious that the issue was larger than we expected when many more notices started appearing… The IRS has not indicated what we should do.”

Saul contacted Columbus-based IRS Stakeholder Liaison Dennis Bell, who quickly responded:

“Right now, we’re also hearing this occurring elsewhere and are working it through our issue management system,” Bell wrote. He said the latest IRS information on this was issued Aug. 13, and highlighted this section as most notable:

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 the IRS is processing due to COVID-19. Any payments will be posted as the date we received them 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 the IRS can process them.

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

Due to high call volumes, the IRS suggests waiting to contact the agency about any unprocessed paper payments still pending. See www.irs.www.irs.gov/payments for options to make payments other than by mail.

“Payments can take up to three weeks to post to our system after being cashed, so IRS is advising taxpayers and reps to wait as stated above,” Bell wrote. “At that time, they will post back to the date we received them.”

He said practitioners can also call the Practitioner Priority Service at 866.860.4259 to address individual case issues. PPS service hours are weekdays 7 a.m. to 7 p.m.

“My best suggestion here is to call later in the day or later in the week to minimize hold times,” Bell wrote. “Also have POA completed and available before calling. They may be able to put a hold on notices depending on the case.

“My advice is always on the side of building your case/documentation whichever course is chosen,” Bell wrote. “For example:

  • “Even though correspondence may take a while to be opened, I’d always request a signature/return receipt to document delivery.
  • “When speaking to an IRS representative, always get their name and ID #.
  • “Get confirmations and/or transcripts showing the payment whenever possible.”

Read the IRS notice in its entirety here.

Late Friday the IRS also announced it has temporarily stopped mailing notices to taxpayers with balances due.

The Ohio Society of CPAs agrees with the AICPA’s recommendation for the IRS to delay collections activities by at least 90 days after July 15. At that time, the IRS should reassess the appropriateness of re-establishing any collections activities.

In a related action, House Ways & Means Committee Chairman Neal this week sent a letter to the IRS asking for a stop to notices until the backlog is cleared – another positive step for practitioners and taxpayers.