As a result of the Pandemic, the Internal Revenue Service has experienced significant delays in processing checks received for payment of taxes. In most cases, IRS Revenue Officers are recommending that Taxpayers make payments electronically via the IRS website.

We have received many calls from Taxpayer concerned that even after six months, the IRS has failed to acknowledge the receipt of a payment made by mail and have continued sending letter threatening collection actions.

If this occurs, Taxpayer can contact the IRS collection division and request a collection freeze on the account while the payment is being processed. If the IRS agrees to such a collection freeze, we recommend that the Taxpayer memorialize the collection freeze and (in writing) request a conference with the supervisor if at a later time the IRS later determines that forced collection actions should be taken. This will help to preserve your rights to a Collection Appeals Program hearing to protect you before such forced collection actions occur.

Another option that some Taxpayers have chosen is to contact the bank to place a “stop payment” order on the check. Then, make a substitute electronic payment via the IRS website. Unfortunately, if you use this method, then the IRS will likely charge you an insufficient funds penalty in the amount of $25 to up to 2% of the amount of the payment which is greater: You could later request abatement, but there is no guarantee that the IRS will abate.

If you have any questions regarding your this or other tax payment problems, please contact attorneys at Holtz, Slavett & Drabkin.