Alert regarding uncashed federal tax payments and potential IRS notices

September 9, 2020

Important information regarding uncashed federal tax payments and potential IRS notices

The IRS is experiencing problems in processing federal income tax payments
As a result of IRS office closures during the pandemic, there are instances where checks that taxpayers have mailed to IRS offices have not been processed. In some cases, this has resulted in IRS issuing notices regarding balances due.

This IRS payment processing problem is occurring for federal income tax returns that are filed electronically, and payment due is not paid electronically but rather is mailed with an IRS payment voucher. The IRS has immediate knowledge and awareness of a tax balance due, but the tax payment is stuck in the mass of mail that has apparently been building up at IRS offices during pandemic-related office closures.

Avoid the urge to stop payment on tax payment checks mailed to the IRS
Under normal circumstances, it may be prudent to consider stopping payment of a check that has been outstanding for what may seem to be an unreasonable amount of time.

However, it is generally not advisable to do that with checks payable to the United States Treasury for tax payments. If the IRS unsuccessfully attempts to process a check for which payment has been stopped the IRS will generally assess a $750 penalty. Although it may be possible and highly likely to request abatement of the penalty, it is better to avoid the penalty by not stopping payment of the check, especially now that IRS offices are slowly reopening, and mail is being processed.

The IRS has temporarily stopped mailing notices with balances due to taxpayers - but seek guidance before you take action
The IRS is taking steps to avoid confusion by suspending the mailing of three types of notices – CP501, CP503, and CP504. These automatic follow-ups to CP14 notices inform a taxpayer that they have a balance due to the IRS.

Taxpayers that received a CP14 notice and mailed a tax payment in response to the notice should be aware that their payments may still be unopened by the IRS. If you received a CP14 notice but have not yet responded to that notice, the IRS is encouraging you to respond as soon as possible.

Any previously mailed payments will be credited to a taxpayer’s account on the date when the payments were received rather than the on the date when the mail is opened. Therefore, as advised above, the IRS is reminding taxpayers in this situation not to stop payment on any checks that were mailed and to make sure that the funds remain available in their accounts.

Although the IRS has been working to stop the automatic mailing of follow-up notices, some taxpayers may still receive these notices. It is suggested that you wait to contact the IRS during this suspension time in order to give the IRS a chance to begin catching up on the opening of mail.

Finally, the IRS has stated that it will provide relief from bad check penalties for checks that the agency has received between March 1 and July 15 due to delays in this IRS processing
If you receive one of these follow-up notices and you believe that you have already paid the tax, do not pay again. If you have any questions or would like us to review any notices received, please reach out to your Herbein contact or email us at

Article contributed by Michele Burkins.