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IRS Update January 13 on Return Processing, Check Cashing

BobKamman
Level 15

Mostly the same blah blah blah.  Important numbers:  Still nearly 7 million 2020 returns not processed.  How many people will be working on these, once 2021 returns start arriving?  Allow 60 days for your check to be cashed, don't stop payment on it.  This is your government's money that belongs in your government's bank account.

As of November 24, the backlog was 7.1 million individual returns.  The number has decreased by 0.2 million.  I'm not very good at math -- could someone tell us, at this rate, how long it will take to clear the backlog? 

The IRS is now opening mail within normal timeframes. The IRS has also made significant progress in processing returns. As of December 25, 2020, we had 6.9 million individual tax returns in the processing pipeline. For refunds that could not be issued in 2020 because the tax return is being corrected, reviewed or awaiting correspondence from a taxpayer, the refund will be issued as a paper check in 2021 per our normal processes. Taxpayers are encouraged to continue to check Where’s My Refund for their personalized [monogrammed, maybe?] refund status.

How long you may have to wait: It depends on where you sent your tax return and where it is in the process. In some locations [we aren't going to tell you which ones], we are caught up or almost caught up. In other locations we are processing returns we received over the summer due to the extended July 15 tax filing due date and, in some cases, are processing tax returns dated as early as April 15, 2020. [I know of one dated March 23.] However, we are rerouting tax returns and taxpayer correspondence from locations that are behind to locations where more staff is available, and we are taking other actions [name one] to minimize any delays. Tax returns are opened in the order received. As the return is processed, it may be delayed because it has a mistake, is missing information, or there is suspected identity theft or fraud. If we can fix it without contacting you, we will. If we need more information or need you to verify that it was you who sent the tax return, we will write you a letter. The resolution of these issues depends on how quickly and accurately you respond, and the IRS staff trained and working under social distancing requirements to complete the processing of your return.

What you should do: Other than responding to any requests for information promptly, there’s no action you can take. We’re working hard to get through the backlog. Please don’t file a second tax return or contact the IRS about the status of your return.

If you mailed us a check, it may be in the backlog of unopened mail.

How long you may have to wait: We’re opening mail as quickly as possible and expect to process any checks within 60 days of their arrival.

What you should do: We’ll apply your payment on the date we received it, not the date we processed it. To avoid penalties for a late payment:  

Don’t cancel your check

Make sure you have funds available to cover it


We’re forgiving Dishonored Check Penalties if your check doesn’t clear because of processing delays. This applies to payments we received starting March 1, 2020 and through December 31, 2020. Interest and other types of penalties may still apply.

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6 Comments 6
IRonMaN
Level 15

If you were to do a survey right now, would the IRS folks that process tax returns jump into the number 1 spot for most essential employees for COVID vaccine rankings?  I know those survey numbers would change come April.


Slava Ukraini!
Just-Lisa-Now-
Level 15
Level 15

They need to stop the damn computers from sending out bills!   Too many checks are still sitting in unopened mail!


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Glossy847
Level 3

I have a client who received a notice to levy.  We filed an amended return in June two weeks after filing the original return due to receiving an amended K-1 from a trust which results in a refund  not a bill for $7,000. Can't get through to anyone to explain.   I have prepared a form 12153 today Request for a Collection Due Process.  Does anyone know if the IRS has stopped any collections because of the backlog?

0 Cheers
BobKamman
Level 15

@Glossy847 

It's somewhat early for you to have received the official "Notice of Intent to Levy and Notice of Your Right to a Hearing."  The earlier IRS notices make vague references to collection powers, but that doesn't trigger the eligibility for Form 12153.  It may not hurt to file that, though, because it will probably get processed faster than any other correspondence, and result in a Collection freeze.  

Glossy847
Level 3

Thank you BobKamman for your reply.  We did file the form today.  Have a few weeks before the threat to levy, so hopefully this will stop collection until the 1040X is processed.

sjrcpa
Level 15

Probably a CP504. Client just sent me one dated 12/21/20 for a return filed in September 2020. Even that seems quick.

Little problem-not giving the now deceased taxpayer credit for the check they cashed in September.

Problem 2 -not sending me a copy of the letter. I have POA on file for when she was alive and one for her estate.

Fun times.

The more I know, the more I don't know.