IRS updates taxpayers on its operating status

by | Aug 21, 2020

A few noteworthy updates about IRS operations


The IRS recently announced the current operating status of its various operating units. In addition, the announcement informed taxpayers they need not respond to late payment penalty notices if they timely mailed tax payment checks due by July 15, 2020. The IRS confirmed that although it receives mail, its mail-processing function remains scaled back causing a backlog of unopened mail. The IRS reassured taxpayers that once it processes the payment, the payment will be posted as of the date the IRS received the payment and not the date the IRS processed the payment. The IRS suggests waiting to contact the agency about any unprocessed paper payments and suggests that any late payment penalties that were assessed by the IRS during this time will self-correct and be abated later.  

Please note that based on the IRS’s guidance the taxpayers can still end up with the late payment penalties because the IRS is confirming in its announcement that it will process the payments with the date the IRS received the payment and not the date the payment was mailed. This statement by the IRS is incorrect. Section 7502, which states the “timely mailed, timely filed” rule, also considers “timely mailed as timely paid.”  

Taxpayer should carefully review any notices they receive from the IRS. If the taxpayer confirmed that the payment has not yet been processed, the IRS recommends not responding to payment due notices. However, if a penalty notice asserts a delinquency penalty because the tax payment was received or processed late, but was timely mailed, such penalty notice may require the taxpayer to respond with a proof of timely mailing of the check and an explanation of the provisions in section 7502. 

In the announcement, the IRS acknowledges longer than usual time for processing all of the taxpayer paper or e-filed correspondence, including the tax returns. The IRS encourages taxpayers to use online services at whenever possible, including making electronic payments of tax via Electronic Federal Tax Payment System. Other items to note include an update that the CAF backlog for processing third –party authorizations is 15 business days and that taxpayer assistance centers have reopened, but require an appointment for in-person assistance.  

If you have any questions about the information provided in this tax alert, please contact a member of the WNT Tax Controversy group. 

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This article was written by Patti Burquest, Alina Solodchikova and originally appeared on 2020-08-20.
2020 RSM US LLP. All rights reserved.

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

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