At the beginning of the COVID-19 pandemic, the IRS cut back on processing mail, among other services. If a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog of mail.
Payments in the unopened mail will be posted and credited on the date the IRS received them, rather than the date the agency opened and processed them.1 However, for due date and interest purposes, the IRS will use the postmark date.
Balance due notices suspended
The IRS has suspended mailing balance due notices because they are still dealing with this backlog.2 If a taxpayer had sent a payment through the mail which has not yet been processed, continuing to send balance due notices would create confusion for those taxpayers.
The notice suspension applied to CP501, You Have Unpaid Taxes for 20XX; CP503, Second Reminder: You Have Unpaid Taxes for 20XX; and CP504, Notice of Intent to Seize (Levy) Your Property or Rights to Property. These notices are all sent after a taxpayer fails to respond to a CP14, Balance Due (CP14 mailings are not suspended).
Because call volume is still high at the IRS, wait to contact the agency about any unprocessed paper payments still pending. Or, make alternate payments arrangements at:
Bad check penalties waived
Taxpayers should not stop payment on their checks and continue to have funds available so the IRS can process the payments and avoid potential penalties and interest. The IRS will provide relief from penalties for dishonored checks the agency received between March 1 and July 15 due to delays in this IRS processing.3 However, interest and other penalties may still apply.
Mailbox rule applies
Under the mailbox rule,4 a return will be treated as filed on the date of the postmark and taxpayers do not have to worry about their returns sitting unopened in IRS mail centers affecting the timeliness of the filing.
2 Announcement, “IRS temporarily stops mailing notices to taxpayers with balances due” (August 21, 2020)
4 IRC §7502