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My Uncle does taxes by hand and does not use tax person.

He filed 2020 and sent check for amount $123.45, the amount he owes. iRS cashed this check few days after he mailed 2020 return (back in Apr 2021).

He used the 2020 1040 SR form

Now IRS sent letter that he is entitled to $123.45, but that they did not receive his return.

The letter says file return, else he will not get $123.45 credit

The letter says if he already filed then re-file again and put signature with new date.

If he files again, won’t he still owe $123.45. Or does he need to file differently?

Before we contact IRS, we just wanted to know what is going on.

Thank you

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    IRS are notoriously bad with reading their mail. They cashed the check, but the return itself is either still waiting to be typed into the computer or may have been lost. E-Filing is the way to go. There are free ways to e-file if your uncle doesn't want to pay for the software, links are on the IRS website.
    – littleadv
    Jan 26 at 17:13
  • He is unable to use computer, no issue with paying for software
    – Marium
    Jan 26 at 17:15
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    Maybe his niece can help... While legally there's nothing wrong with filling the forms by hand and mailing them, the actual reality is such that issues such as what he's having will only become more frequent.
    – littleadv
    Jan 26 at 17:24
  • I’m trying to get him to use computer… keeping fingers crossed
    – Marium
    Jan 26 at 18:30
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    The IRS is backed up with returns from 2020. i.e. They have not keyed, looked at, hand returns for 2 yrs.
    – paulj
    Jan 27 at 15:03

2 Answers 2

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Either he made a mistake and never owed the $123.45, or the amount due is based on some information that the IRS doesn't have available without the return (which they lost).

When people don't file a return (or a paper return is lost) the IRS takes what they know based on forms they get copies of (1099/W2/etc.), and they calculate what the individual owes or is owed based on that information and then send a nice letter. This information is limited, often people have other things to indicate on their tax returns that the IRS doesn't know about ahead of getting the actual return.

In this case it seems they lost the paper return but got the check, then based on the info they had available they saw no amount actually owed, so they considered the amount he paid an overpayment and thus the letter indicating they owed him a refund. If his original return was correct, then re-filing will clear it up and the amount already paid (and paid on time) will be used up and he'll have a $0 balance in their eyes.

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  • How would he re-file to reflect $0 balance? Because IRS cashed check for $123.45.
    – Marium
    Jan 26 at 15:45
  • @Marium Right, they cashed the check and view it as an overpayment, if he re-files the same tax return showing that he actually owed 123.45 then when they process the return the amount he already paid will satisfy that owed amount and net to $0.
    – Hart CO
    Jan 26 at 15:48
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    The letter is not indicating that they owe him this money. (The OP is perhaps confused about this.) The letter is saying that they have credited this payment to his account, but that because they have not received a return, they don't know if the payment amount is correct. The IRS will not be sending this money back unless they get a new 2020 tax return in the mail showing an amount due of less than the credited payment. Jan 27 at 1:46
  • @BenMiller-RememberMonica That could be, but if the uncle had no tax obligation that they were aware of it would make sense for them to show a balance owed to him for the same amount as the check he sent in. I know they send letters when refunds are bigger than return indicates or when amount owed is different than what return indicates, I thought I had also seen some indicating a refund owed in cases of non-filing.
    – Hart CO
    Jan 27 at 5:05
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The same thing happened to me this year. I mailed my 2020 tax return in March 2021 with a payment check enclosed in the same envelope. My bank shows that they deposited my check within a couple of weeks after I sent it. Then in December I received a Notice CP80 from the IRS in the mail. This notice is used when they have received a payment, but have not received a tax return to go with the payment. The notice tells you to file your tax return today.

What the notice is telling him is that they have received the $123.45, and that they have credited it to his account. However, they have not received a 2020 tax return, so they don't know how much he owes for his 2020 taxes. The warning on the notice says that he needs to file this tax return, because if the credit is not applied to a particular tax return, it may eventually be forfeit.

Yes, it is stupid that the IRS deposited the check and lost the return that was in the same envelope, but that is apparently what happened to me, your uncle, and another user today. I'm guessing the IRS lost a large group of returns. I am grateful that the check was deposited and credited correctly.

To remedy this, he just needs to mail in a copy of your tax return again to the address shown on the notice. Hopefully he kept a copy of his return like he is supposed to, because if he didn't, he will have to recreate it.

There will be no penalty for this if he sent in his check before the tax due date, because the penalty is for paying late, not for filing late. Having said that, your uncle should get this done as soon as possible (the notice says "today"), because they are about to start receiving lots of 2021 tax returns, and there is great potential for more mistakes by the IRS, sadly.

When I sent in a full copy of my tax return in December, I included a letter stating that this was a duplicate tax return sent in response to a CP80 notice, and that the original was sent in last March. My hope is that if they somehow find and process my original return, they won't wonder why they got the return twice.

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