Just like a lot of businesses, museums, and parks, IRS service centers have been closed for about three months to reduce the spread of the coronavirus. Many IRS services are fully automated and have kept on chugging, like processing e-filed tax returns and sending refunds. However, all IRS services that are performed by a human being stopped cold when services centers closed, including mailing out “balance due” notices to taxpayers.
Most, if not all, of those unmailed balance due notices reflect payment due dates that have already passed. The IRS determined that the time and expense of generating all the notices again with new due dates was too high. So, they are mailing out those “old” notices with an insert of another notice saying that the due date printed on the first notice is extended. What? Based on my experience, taxpayers find it challenging to read one IRS notice – unlikely they will read two.
When you are freaking out about getting an envelope from the IRS is not the best time to grasp this Two Notice Concept. In case this happens to you, here’s what to do:
- Take a Breath – We are getting used to our “normal” being anything but normal. Don’t let your existing stress from the pandemic escalate. Deeply inhale and exhale to calm yourself, then open the envelope – procrastination will only increase your stress.
- Read All Contents – Read all contents of the envelope thoroughly. Check the amount(s) due, dates and reasons for underpayment with your records to verify the accuracy of the notice. These notices are boring and long, making it easy to overlook important information.
- Pay by the New Due Date – If you verify that the balance due notice is accurate, avoid incurring additional interest and penalties by paying the balance by the new due date. For most unpaid income tax balances, the new due date will be July 15, 2020.
- Follow-up on Inaccuracies – Any inaccuracies or questions should be followed-up on before paying anything. Notice recipients are directed to visit the listed website or call the phone number on the notice. Unfortunately, IRS phone lines are extremely busy. It’s going to be several weeks before taxpayer service lines are fully staffed.
IRS service centers are re-opening and mailing out all the notices that didn’t make it out the door before the pandemic shutdown. Balance due notices with due dates that have passed will include an insert of another notice saying that the due date printed on the first notice is extended. Confusing? Yes. Need more information than what’s provided here? Check out www.irs.gov/coronavirus.