Tax returns that were filed in February with the IRS STILL have not been processed. There are returns that are paper filed (by mail) every year. Sometimes it’s due to some rare situation that means an electronic filing (efile) couldn’t be done. Sometimes it’s because the taxpayer prefers to paper file.
Either way, paper filing a return is a legal way to file. And until this year, it’s also been expedient.
And then coronavirus hit. The IRS is still working at half staff in their offices in order to maintain social distancing. Some of the workers are teleworking, but that doesn’t help with clearing the tractor trailers full of a mountain of paperwork.
In the past, it usually takes 3-4 months to clear paperwork after a shut down. However, these aren’t normal times. The half staff probably can’t keep up with the paperwork now and that means the old stuff just sits there.
People are waiting for information for loans, for legal situations and to get refunds.
So far, the only statement that the IRS has made is that the returns will be processed in the order in which they were received. And if they haven’t gotten through February filings yet, you know it’s going to take a while.
The IRS Computers are Working Overtime
Meanwhile, though, the IRS computers are working overtime. They are sending out notices to people whose returns have not been processed, demanding the returns. Sometimes the computers have sent out automatic penalty statements and even “intent to levy” notices, stating the returns are late.
They’re only late because the IRS is so far behind in opening up their mail.
The IRS has been told to stop the messages, but It doesn’t look like they’ve slowed down. At least based on what my clients are saying.
And Then There are the States
The IRS says that their notices might not be real.
But the state notices are very real. In fact, some states have cut their notice time in half. That means they may already be taking action by the time you get notice.
Prepare, Don’t Panic
If you get a notice, you just need to know who to call. If you don’t have an tax resolution expert on your team, get hold of us. We do. He’ll go over your info free of charge and then tell you what it will take to get it resolved.
Contact Us and we can put you in touch with him. The challenges are coming. Don’t sit on the notice.
Don’t panic. But don’t let too much time go before you take action. Once they sweep the cash out of your count, it’s time consuming and expensive to get it back. Make no mistake, they’ll do it if they threatened it.
Keep up to date on what the IRS and state tax agencies are doing. Knowledge is power!