But I Already Paid the Tax by Jeffrey M. Mutnik, CPA/PFS

Posted on August 27, 2020

The IRS typically takes about two weeks to process paper tax returns and payments it receives via mail from taxpayers. However, 2020 is far from typical. In the current environment, taxpayers should be prepared for some challenges, some of which the IRS is working to alleviate.

Due to the IRS’s temporarily shut down of most of its operations in March, it is estimated that up to 15 million pieces of mail delivered to the agency sat untouched and are only now being opened and processed.  Included in those envelopes are taxpayers’ tax payments for 2019 and their quarterly estimated tax payments for 2020. While these payments were delivered to the IRS and are considered under tax laws as having been paid, the IRS erroneously sent notices of unpaid tax balances to many taxpayers.

At the request of Congress, the IRS announced it will stop mailing these delinquency notices to taxpayers automatically until it can reduce its backlog of mail. The agency also issued a reminder that it will post payments as of the date of receipt rather than the date of processing. To avoid penalties and interest, taxpayers should not cancel their checks.  However, to be fair, the IRS is providing taxpayers with “relief from bad check penalties for dishonored checks” it received between March 1 and July 15 “due to delays in this IRS processing.”

You should take a moment to ensure you have ample funds available in your checking account to cover the IRS’s delayed processing of your tax payment. This will yield a much better outcome than if you were to engage in further correspondence with the IRS about reimbursement for bank fees.

Remember that most banks will honor a check for 180 days, or approximately six months.  If there is a possibility that the IRS will not deposit your tax payment within 180 days of issuance, contact your bank to discuss the situation and develop a work-around solution.

In the meantime, if you receive a letter from the IRS, contact your tax advisor. All IRS notices require a response, even if they relate to the IRS’s COVID-19 shutdown.

About the Author: Jeffrey M. Mutnik, CPA/PFS, is a director of Taxation and Financial Services with Berkowitz Pollack Brant Advisors + CPAs, where he provides tax- and estate-planning counsel to high-net-worth families, closely held businesses and professional services firms. He can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or via email at