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Did You Receive a Late Payment Notice from the IRS? Don't Panic

March 02, 2021

If you receive a notice from the IRS indicating that you owe money you have already paid, here’s what you need to know.

Have you received a notice form the IRS indicating a payment is due that you have already paid by check? Do you have a check written to the IRS more than 60 days ago that is still outstanding? Don’t fret, here’s what you need to do.

More about the notices

Taxpayers nationwide are receiving notices from the IRS indicating that they owe money, plus interest and penalties, for taxes that they have already paid. Many times taxpayers are receiving subsequent notices demanding payment and/or threatening action if the amount remains unpaid.

Why is this happening?

Due to the lockdown last March, the IRS still has a tremendous volume of unopened and/or unprocessed mail. This could include your uncashed check.

What’s a taxpayer to do?

Well one thing a taxpayer should not do is to stop payment on the initial payment and mail in a new check in response to the notice. The new check is likely to sit unopened in the same pile as the initial, uncashed check.

One solution is to just sit tight and give the IRS an opportunity to catch-up, cash your check and update their records. This requires taxpayers to be patient and not stress out over the potential receipt of several notices requesting payment. If possible, either you or your tax advisor can contact the IRS by phone to request a collections block be put on your account for 6-8 weeks in order to give the IRS time to catch-up and cash your check.

Make payments online!

An alternative, for impatient taxpayers or taxpayers that received a notice threatening action and the date of the threatened action is near, is to go on-line and pay the tax due. Once payment is confirmed, you can consider putting a stop payment on the original check. However, if you do that, the IRS may not give you credit for making the payment on that earlier date. Instead, the date of receipt may be as of the on-line payment date, which means additional late payment interest and penalties may apply. If you can afford to let the IRS cash both payments, and owe you a refund for the overpayment, that should ensure the posting of the payment on that earlier date.

How to make an online payment

Paying on-line is easy and avoids problems with uncashed payments sitting with the IRS. All you need to do is go to, select the box to “Make a Payment”, select the payment method - bank account (direct pay) or debit card or credit card – and proceed as instructed. Please note there are fees associated with paying by debit card or credit card.

On-line payment allows you to make regular tax and/or extension payments, estimated tax payments and payments due as the result of a notice.

Avoid this problem in the future

To avoid these problems going forward, we recommend all tax payments be made on-line (or, if making payment with an originally filed return, via electronic withdrawal). In our current environment, paying taxes by check mailed to the IRS increases the likelihood you will be one of the taxpayers described at the beginning of this blog.

Taxpayers filing their returns on or before April 15th, and who made quarterly estimated tax payments, may want to verify that their estimated tax payments have cleared their bank account prior to filing a return claiming an uncashed estimated tax payment as taxes paid for the year. If an estimated tax payment remains outstanding at the time of the filing of your return, you will likely receive a notice indicating additional taxes are due.

Before making any payments due pursuant to a notice, you should reach out to your tax professional and provide him/her with a copy of the notice so that he/she can advise on how best to proceed. Contact us for assistance.

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