How the Mail Backlog at the IRS May Impact Your Tax-Exempt Organization

Posted By Christina Bell, CPA

The IRS has an enormous backlog of unprocessed mail, which includes paper returns and extensions, due to the closing of its processing centers for several weeks during the pandemic and then re-opening them with limited staff. This backlog of unprocessed mail has caused many Organizations to receive erroneous computer generated tax notices from the IRS requesting returns, payments, and additional information. If your organization paper filed its Form 990 or Form 8868 any time after March 2020 the IRS may not have gotten to it.

If your organization filed its Form 990 timely by mail and it remained unprocessed after its due date, expect to receive a ‘Failure to File Notice’ from the IRS. When received, respond directly on the ‘Response Form’ that accompanies the Notice by completing the portion indicating the organization has already filed its Form 990. You will also have to include a signed and dated copy of your organization’s Form 990 with the Response Form.

If your organization timely filed Form 8868 by mail and it remained unprocessed when the IRS received your Organization’s Form 990, an IRS Tax Notice will be automatically generated and mailed assessing the organization a $20 per day late fee, plus interest. When received, respond by calling the phone number provided on the Notice. The IRS is open during the week from 7 a.m. to 7 p.m. and is currently experiencing an extremely high call volume. To increase your chances of reaching an agent on your first try, call between the nonpeak hours of 6 and 7 on Tuesdays, Thursdays, and Fridays. When you do reach an agent, be sure to have copies of your Notice and extension readily available.

If your Organization used a tax professional to paper file these Forms and you receive a Notice, reach out to them. They should be able to respond on your behalf and resolve the matter. You can always reach a BLS team member directly at info@belfint.com.

Photo By: Kate McNulty

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