Despite having about 12 million pieces of unopened mail at one point this summer, the Internal Revenue Service has reportedly been sending notices to taxpayers while correspondence and payments sit unopened, Neal, D-Mass., said. Therefore, Neal said, many taxpayers have already made payments the IRS is calling on them to send.
"The IRS should not resume sending notices to taxpayers until the backlog has been reduced to pre-pandemic levels and taxpayer accounts have been updated," Neal said.
The IRS should also consider setting up an online portal for taxpayers to notify the agency that they have mailed payments since the beginning of March, Neal said. He added that it could help the agency avoid sending incorrect notices to taxpayers who have already sent payments.
Many taxpayers mailed in their payments months ago, and it's the agency's duty to make sure they don't get charged any penalties or interest for delays that aren't their fault, Neal said.
Mail piled up as a result of IRS office closures in the wake of the pandemic, reaching about 12.3 million pieces of correspondence, Rettig told the Senate Finance Committee in June.
The IRS has started mailing backlogged letters and notices to taxpayers, and many notices were sent with past due payment or response dates, according to its website. The agency generally won't generate a new notice but will include an insert providing a new pay or response date, according to its website.
In early June, more than 20 million notices were sent with the appropriate insert or current dates, though about 11,000 notices were sent without the insert, according to the website. Taxpayers who received those 11,000 notices were contacted and provided corrected due dates, the website said.
Payments that taxpayers sent may be unopened, the IRS said. Those payments will be posted as of the date received, not the date the agency processed them, it said. The IRS also said on its website that it is providing relief from penalties for bad checks received between March 1 and July 15, though interest and penalties could apply.
Neal said was that insufficient.
The IRS declined to comment on Neal's letter. A spokesman told Law360 the IRS generally responds to lawmakers directly.
--Additional reporting by Dylan Moroses. Editing by Neil Cohen.
For a reprint of this article, please contact reprints@law360.com.
