You filed your 2020 taxes on time but you have also received a letter from the IRS, what went wrong?

In most cases, it is nothing you could avoid. You should read your letter carefully but be aware, the IRS’s electronic system is not opening the IRS’s mail. The electronic system is generating letters far faster than the IRS can open your mail and enter your tax/payment data so you might receive a late notice or tax due letter even though your payment is sitting in their “inbox”.

Here is what the IRS is saying:

We’re open and processing mail, tax returns, payments, refunds, and correspondence. However, COVID-19 continues to cause delays in some of our services. Our service delays include:

• Live phone support
• Processing tax returns filed on paper
• Answering mail from taxpayers
• Reviewing tax returns, even for returns filed electronically

Due to the changes that were passed in March 2021 that may have affected your 2020 tax return, the IRS is behind in several key areas of processing. According to the National Taxpayer Advocate, the IRS is holding roughly 29 million returns for manual processing.

Much of the workforce at the agency is teleworking. However, some tasks can’t be done remotely. Employees have to be on-site to receive, sort, and distribute mail and to process paper returns. Many returns require manually inputting information into the IRS systems or correcting errors. And although processing centers are open, they can’t operate at full capacity, because of social distancing requirements in effect until recently.

Checking their “Get my payment” link may help you determine if your return is in process. The IRS is mailing IRS Notice 1444-C to people who received a third Economic Impact Payment, so again, read your letter carefully before assuming you have a problem.