Last week, NSA received reports from members whose clients had gotten unusual notices from the IRS. These notices claim the individuals owe taxes despite having paid the taxes before July 15. Although the checks for the taxes are reported to have cleared the bank, the IRS is sending out notices dated Monday, August 17, that show the tax due along with penalty and interest.
According to an NSA source, the issue is a result of IRS employees being sent home as a result of the COVID-19 pandemic. Many of the employees who were sent home are responsible for opening the mail that is received by the IRS. These employees are only now returning to work.
The IRS is advising that tax preparers call the IRS and use their PTIN to discuss specific accounts that have experienced this issue and request that a hold be placed on the account. The IRS has indicated that hold of up to 8 weeks may be requested.
Most importantly, the IRS has stated that your clients should not put a stop payment on the check.
Your clients must wait for the IRS to process the check. Once a hold is placed on the accounts, the system will catch up with processing the payments automatically.