IRS Tax Payment Still Not Cashed!

[ATSMAN]

I apologize if this issue was discussed in another thread. I have two clients that mailed their balance due payment on or about 7/15. I had advised them to pay electronically but these people always pay by Money Order or Check. Well the payments have not been cashed. I client received CP14 notice. One client put a stop payment on their $4000 check and paid electronically using Direct Pay. I think he will most likely have to pay the late payment and interest penalty.

I know IRS had issued an alert but we can't get hold of anyone at IRS to figure out what is going on and how to get relief because of an IRS problem. I was told to simply wait!

[Rapid Robert]

Simply wait. Rettig told us back in March that IRS would continue all critical functions despite coronavirus.

[MDEA]

There is nothing to find out. They have not opened the envelope with the check yet. It will be opened some time the check put thru and returned do to being stopped and a fee charged the taxpayer. I have told my clients don't mail checks go online if you mail I can not help you with the consequences.

[Anarchrist]

https://www.irs.gov/newsroom/irs-temporarily-stops-mailing-notices-to-taxpayers-with-balances-due

The irs has stated if checks are cancelled and repaid, non-paying & late paying penalties will be applicable.

[ATSMAN]

https://www.irs.gov/newsroom/irs-tem...h-balances-due

The irs has stated if checks are cancelled and repaid, non-paying & late paying penalties will be applicable.

That is the problem. One client panicked and stopped payment on his check and then used Direct Pay to pay the balance due. They should have done that to begin with as I recommended. The issue is if there is a way to get the penalty waived because he did mail a check on time but panicked! Unfortunately this client has used his one time penalty abatement few years back.

[MDEA]

I would wait till the penalty is imposed than try to have it abated for cause.

[Anarchrist]

try to have it abated for cause.

The irs has already stated that is not a reasonable cause. Unless the irs gives guidance that they're changing that policy, tell the client he'll have penalties and interest to pay. There's no reason to bill the client in addition to that for work you know is a complete waste of time.

[TaxGuyBill]

The irs has already stated that is not a reasonable cause.

I very strongly suspect that you could push it and get the penalty abated (unsure about the interest though). But unless the amount is large, it may not be worth the hassle.

[ATSMAN]

I have a hunch that this issue will be problematic for many taxpayers who actually mailed their payment in time but the payment got lost in the pile at IRS and unfortunately taxpayer did not get proof of mailing.

IRS may make an administrative decision to just charge interest and waive all penalties. I am hoping that is the case. At any rate I am hoping that my two clients learned a valuable lesson (that I was always recommending) and in future they pay balance due electronically.

BTW if I wrote a $4000 check and it remained uncashed for a month or so I would be nervous too! Thank God I do most of my banking and bill payments electronically!

[Uncle Sam]

I just had a case of a 2019 Form 1041 with a balance due, was e-filed the first week of June (e-file accepted) and the check due was paid the same week. The IRS sends my client a letter last week that there's a balance due plus int. and pen. Once the client sent me the notice I asked her to check with the institution (brokerage account) to see if the check was cashed. The IRS cashed the check 2 days after the letter from IRS was dated.
By the way - this is a Florida resident who sent the 1041 payment to Ogden, Utah

[ATSMAN]

I was talking to another tax preparer in my area and he has 5 clients with uncashed checks. None of his clients received CP 14 so far that he knows. I am wondering if certain service centers are more backlogged than others. Most of my clients mail payments to:

Internal Revenue Service
P.O. Box 37008
Hartford, CT 06176-7008