IRS Claim and Updated Campaigns

July 27, 2020 | Article

The IRS continues to release campaigns and initiatives aimed at collecting on back taxes owed, compliance issues and more. This brief contains a running list of IRS announcements, campaigns and initiatives that may impact your IRS collections activity.

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Topics include:

  • IRS set to receive $1.5 billion in unclaimed refunds after July 15, 2020
  • IRS clarifies lockbox closures

IRS Set to Receive $1.5 Billion in Unclaimed Refunds After July 15, 2020
For tax year 2016, there are an estimated 1.4 million unfiled individual tax returns that would be due around $1.5 billion in refunds. There is a three-year window to claim these refunds.

In Notice 2020-23, the IRS extended the deadline to file these 2016 returns to claim a refund to July 15, 2020 as a result of the COVID-19 pandemic. Taxpayers stand to lose more than just a refund of taxes paid or withheld by missing this deadline. Many low- to moderate-income taxpayers may be eligible for the Earned Income Tax Credit worth up to $6,269 for 2016.

If you need to claim a refund on your 2016 tax return but do not have your W-2, 1098, 1099 or any other income documents available, you can obtain these via the IRS’ Get Transcript Online tool.

IRS Clarifies Lockbox Closures in Cincinnati and Hartford
As of July 1, 2020, the IRS closed several business payment P.O. Boxes (or Lockbox addresses) in Cincinnati and Hartford. Any payments mailed to these closed payment locations will be returned to sender, as there is no forwarding service available.

These lockbox closures are only applicable to non-1040 filers. There are several returns filed using Cincinnati and Hartford lockboxes, so it would be smart to consult the IRS’ Where to File Paper Tax Returns tool to verify the address to file your individual tax return, or the Where to File by Return Type tool for business returns, as there may have been changes due to these lockbox closures.

Should your payment be returned, the IRS will assess a late payment penalty. If that is the case, you have the potential to have your penalties abated. Please make sure anything mailed to the IRS is sent via certified mail so that it can be tracked, and keep copies of any returned payments. The more evidence you have, the higher the probability the penalties will be removed.

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