Throughout this unusual year, many people have seen a slowdown in their personal and business lives, and things at the IRS are no different. As they deal with the massive backlog of mail, you may receive inaccurate letters and tax notices, delayed refunds, and delays in time-sensitive matters.
Our advice? Take a deep breath, and don’t worry. If you submitted your payment on time and received a notice of late or missing payment, it’s likely due to the current backlog. While your timely payment sat unopened and unprocessed, computer-generated notices were automatically being sent your way.
A Real-Life Example of How Big the IRS Backlog Is
One of our team members recently shared his experience, and it’s a great example of what many out there are currently dealing with. He filed his tax return on September 21st — plenty of time before the October 15th deadline. Since then, he’s received two IRS notices in the mail (one in October and one in November) stating that his payment is late. His check has also yet to be cashed. After calling the IRS and sitting on hold for 60+ minutes, he was finally connected to a representative who explained that they did receive everything from him on September 25th, but none of their systems talk to each other. Therefore, the notices went out automatically, and the check is in another long backlog to be cashed.
How This Backlog Is Translating into Other Frustrations — and Further Backlogs
In June, the IRS had already generated 11 to 14 million pieces of mail while continuing to receive an estimated 1 million items each week. And due to the pandemic, many IRS offices were still closed at that time or had work-from-home policies in place. As they worked hard to address the backlog, the October 15th deadline crept up, giving them additional volumes of incoming mail to manage.
This has caused frustrations for many. For example, delayed refunds were challenging, as many were facing uncertainty and hard times and needed that cash as soon as possible. Inaccurate letters and tax notices (like we see many clients receiving now) have been another headache of their own. Automatic notices specify deadlines to respond by and clarify that further action will be taken if a response is not received by the deadline, causing much panic and stress among those who have already submitted the requested information or payments. And to further complicate things, the notices then direct taxpayers to contact the IRS for assistance, creating a new backlog of long and delayed responses.
Bottom Line: Here’s What We Are Suggesting You Do
It's normal to get anxious when you receive a notice from the IRS, but we encourage you not to automatically assume the tax notices are correct. As the IRS works hard to catch up on things, your time and patience can go a long way. If you have legitimate concerns or want to contact them for peace of mind, we suggest you do so. Remember that there are currently long wait times to connect with a representative.
As always, we are here to make the complex simple.