Published on 17/09/2020
Did you receive any notice of non-payment from the IRS department despite having made the payment? It might come to you as a shock now, especially with the pandemic and the current financial crisis because of it. Taxpayers across the US have been left flabbergasted as they received stern notices for non-payment of tax dues for which they had already made the payment to the Internal Revenue Service (IRS) department. What caused this massive misunderstanding and what is the way out?
The reason for this crisis is because of the pandemic season. Like many other departments, The IRS has also joined in the long list of departments whose work processes were affected by the Coronavirus chaos. The mess resulted in many Americans receiving notices of non-payment from the IRS, though they had already paid their taxes as per the extended deadline of 15th July. Tax professionals and accountants across the US were swamped with panicked calls from their clients, and the IRS helpline was overwhelmed with the significant number of calls coming in, to the limit that it even stopped responding to some calls from taxpayers. This added to the anxieties of the public, the finance sector, as well as the IRS employees.
Why did this chaos take place?
After its discovery in late 2019, Coronavirus quickly spread across the world and began to slow and even close down major financial sectors of the USA by March 2020. The IRS department was no exception; they too had to stop their routine offline work. It closed its office down from 30th March 2020 due to the virus. Since then, there has been a major backlog of emails, yet to be attended, piled up in their database. In the meanwhile, the automatic IRS billing system continued to send notices of non-payment to many people. This resulted in further chaos across the US.
As a result of this chaos, the IRS department had to roll out a notice on 13th August 2020, acknowledging its fault. The notice has provided a sense of clarity to taxpayers regarding the date of receiving the Email. The date on which email was received will be considered as the date of payment. It would no longer be their processing date. Since then, it has also decided to stop sending automatic mails for non-payment. Adding to the circular, it further stated that bad check penalties would be relaxed for check received between 1st March and 15th July 2020, provided that the check does not bounce or has not been cancelled. However, interest and penalties can still be applied. The agency is further requesting people not to cancel the checks that have already been signed.
What are the probable Solutions?
The IRS department is encouraging people to e-file for tax returns so that they can ensure hassle-free filing while maintaining the given conditions of social distancing. The IRS has further announced that it is ‘working on a solution to provide for the acceptance of Forms 8821 and 2848 electronically by early 2021. The IRS will continue to work on accepting digital transmissions of these forms in support of the Taxpayer First Act.’
Furthermore, the agency has also allowed for e-signatures to be made on certain forms until 30th December 2020, keeping the health of taxpayers and employees in mind. It has also requested that taxpayers should wait before calling the IRS helpline due to non-payment notices as the agency is already working to its optimum to work through the heap of emails received by them.
The IRS can take any of the following measures if it believes that a person is evading payment of taxes: It can file a notice of Federal Tax Lien; it can serve a Notice of Levy, or it can offset your refund. Getting a stern letter of notice is upsetting, especially when there’s no fault of yours. Therefore, it is always advisable that you try to make contact with the department along with the proofs of payment (mailed receipt, copy of your checkbook and a copy of your bank statements). Attach these proofs to the email that you draft to the agency, along with your notice.
While it may be difficult, we have to stick together patiently through these uncertain times. There might be some faults from the department, but we should not blame any particular party. For any advice, you can always contact MyTaxFiler for comprehensive solutions or guidance.