Major IRS 'Payment Due' glitch discovered

An IRS glitch caused erroneous "balance due" notices to go out to an unknown number of taxpayers - ConsumerAffairs

Agency is on the situation and offers instructions for anyone who received this notice.

If you received a notice of a “balance due” from the Internal Revenue Service (IRS) and you’re sure you paid everything you owe, you can probably breathe a little easier.

ConsumerAffairs has learned from the tax agency that an unknown number of taxpayers received the notice because of a system “glitch” and if they made all their payments on time, they owe nothing.

A ConsumerAffairs employee received one of these “amount due” notices on Monday, even though they had already paid their taxes when they filed on Apr 10, 2024 via IRS Direct Pay.

When we called the IRS, an agency customer service representative told us the taxpayer is “one of thousands” who have called about this issue. The IRS told ConsumerAffairs that it has yet to determine the full scope, so “thousands” could actually be thousands or it could be millions.

What happened and how did this happen? The rep explained that the IRS was running a couple of months behind synching up Direct Pay (and possibly other) payments with returns, and had only recently caught up where things were running as they should. 

What to do if you receive one of these notices

After being questioned by ConsumerAffairs, the IRS said it would put out a press release explaining what happened, and the agency is addressing the situation -- including instructions for anyone receiving one of these notices -- as follows:

“The IRS is aware that some taxpayers are receiving CP14 (Balance Due, No Math Error) notices indicating a balance due even though payments were made with their 2023 tax return.

Who is affected: Taxpayers who paid electronically or by check with their 2023 tax return, may show their accounts as pending, although the IRS has received and processed payment through their banking institution. The notice may have been initiated before the payment was processed on the account, or the payment may have been processed but contained errors and requires additional handling to address the error before updating the tax account.

No immediate action or phone call needed: Taxpayers who receive a notice but paid the tax they owed in full and on time, electronically or by check, should not respond to the notice at this time. The IRS is researching the matter and will provide an update as soon as possible.

Note that any assessed penalties and interest will be automatically adjusted when the payment(s) are applied correctly by the IRS.

Taxpayers who paid only part of the tax reported due on their 2023 return should pay the remaining balance or follow instructions on the notice to enter into an installment agreement or request additional collection alternatives.

For affected taxpayers, the IRS apologizes for the inconvenience this delay in processing your payment has caused.”

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