By her calculation, she owed only $200 after shutting down a consulting business last year.
“I didn’t think I owed $1,200, even if I did file late,” Thompson said. “And I was concerned that I couldn’t possibly have made the payment on time.”
The IRS says not to worry. The agency wasn’t able to mail previously printed balance-due notices because its offices were shut down because of the pandemic.
But rather than print new notices with the correct dates, the IRS decided to send the old ones out anyway once the tax agency’s offices began to reopen.
“Given the time it would take to reprogram IRS systems, and generate updated notices, some of the notices taxpayers will receive have due dates that have already passed,” the IRS said on its website, irs.gov. The agency has been providing updates about critical functions during the pandemic.
Over the next few weeks, these notices will probably cause quite a bit of anxiety as they are delivered to taxpayers.
But each notice should also include an insert confirming that the due date in the notice has been extended, IRS spokesman Eric Smith said.
The new payment due date will be either July 10 or July 15, depending on the type of tax return and original due date, Smith said.
Thompson didn’t get such an insert, but after a few tries, she was able to reach a live service center employee who was able to address the discrepancy and help waive the late filing fee.
“The agent couldn’t have been nicer,” she said.
As the IRS boots back up, remember that the closures were not the fault of the staff. So, don’t take out your frustrations on call center representatives. Mistakes are definitely happening, but please keep in mind that during a pandemic with a seriously reduced workforce in the middle of its busiest time of the year, IRS employees valiantly disbursed 160.4 million stimulus payments worth $269.3 billion in about eight weeks.
“I think employees are doing a really good job at getting the work of the IRS done,” said Tony Reardon, the National Treasury Employees Union president.
If you have a question about the balance due on your taxes, visit the website listed in the IRS letter or call the number provided in your notice.
However, wait times may be long, and you may have to try several times to get a live representative, Smith warned.
One thing you don’t want to do is ignore the notice, said Michele Cagan, a certified public accountant and author of “Budgeting 101.”
“A lot of people don’t like to open the notice because they think they’re going to be audited or something super scary,” Cagan said. “But definitely don’t ignore the notice. Open it. Look at what it says. IRS normally sends out notices if your tax amount is wrong. Usually, there is some kind of automatic mismatch on your tax return. Like your W-2 form says that you earned $700 and you accidentally put down $680 or something like that. Or you filed late. There can be a lot of reasons for getting one of these notices. But they’re not always correct.”
In other IRS news
You might earn interest on a delayed refund.
In another response to delays caused by the coronavirus shutdowns of its offices, the IRS said it is paying interest on 2019 refunds issued after April 15, which would have been the normal filing date. This year, the tax deadline has been extended to July 15.
The interest payment could be enough for a nice takeout dinner for two if your refund is the current average of $2,903 as of June 19.
By law, the interest rate for the second quarter, ending on June 30, is 5 percent, compounded daily. The interest rate for the third quarter, ending Sept. 30, is 3 percent. Interest payments may be received separately from the refund.
Here are a few more things concerning the current tax season.
The IRS announced last week that anyone who already took a required minimum distribution (RMD) in 2020 can roll those funds back into a retirement account. The Coronavirus Aid, Relief, and Economic Security (Cares) Act has several provisions that cover retirement accounts, including the suspension of RMDs required for 2020. The 60-day rollover requirement for RMDs already taken this year has now been extended to Aug. 31.
You are required by law to take withdrawals from your IRA, SIMPLE IRA, SEP IRA or retirement plan, such as a 401(k), once you reach 72. (It was 70½ before 2020.) But the Cares Act waives RMD payments for this year, including for inherited IRAs.
Also, starting June 29, the IRS will begin opening in phases its Taxpayer Assistance Centers. But you’ll have to call 844-545-5640 to make an appointment.
Please join me on Thursday, July 2, at noon (Eastern time) for a live discussion.
Reader Question of the Week
If you have a personal finance or retirement question, send it to email@example.com. In the subject line, put “Question of the Week.”
Q: I mailed my tax return on March 6. I live in Michigan and mailed it to Fresno, Calif. I have not been able to track what happened to my return. When I call the IRS, a recording says there’s no information about my return. So, I don’t know if the IRS has received my return. What should I do?
A: There have been severe delays in processing paper tax returns due to limited staffing as a result of the pandemic. The good news is IRS employees are returning to work and have begun tackling the backlog of mailed returns. The bad news is it may take several weeks for the agency to get to your return. If you’ve filed a paper return, the IRS said it will process it in the order it was received.
There are 11 million returns and correspondence the agency has to open and process, said Smith, the IRS spokesman.
“To protect the public and employees, and in compliance with orders of local health authorities around the country, certain IRS services such as live assistance on telephones, processing paper tax returns and responding to correspondence are extremely limited or suspended until further notice,” the IRS said in an operations notice it regularly updates on its website.
The best way to track the status of your refund is by using the “Where’s My Refund” tool. The portal won’t have information about your return until it’s processed, so keep checking back.
Retirement Rants and Raves
Your thoughts: I’m also interested in your experiences or concerns about retirement or aging. You can rant or rave. Send your comments to firstname.lastname@example.org. Please include your name, city and state. In the subject line, put “Retirement Rants and Raves.”