The 2020 tax filing season has been like no other, with the IRS taking “unprecedented and drastic” actions in response to the COVID-19 pandemic.
While Taxpayers aim to get their tax returns in the mail on time, the COVID-19 pandemic may result in returns sitting in mail facilities for days. The IRS has announced taxpayers don’t need to worry if they follow the “mailbox rule:” a paper return is deemed to be filed on the date of the postmark, even if the IRS doesn’t log the return in for days or weeks. This applies whether you use the U.S. Postal Service or a private delivery service (PDS) designated by the IRS.
The mailbox rule doesn’t apply if a non-designated PDS is used, and those returns must be received by the due date to be timely. To prove the IRS has received a paper return, send it by registered or certified mail.
Even if you can’t pay your tax bill, you can avoid excessive penalties by taking certain steps. The IRS recommends that you file your tax return or request an extension and pay what you can to minimize penalties and interest.
Not filing will result in a failure-to-file penalty of 5% of the unpaid tax required to be reported, per month or part of a month. Returns filed more than 60 days after the due date (with extensions) are subject to minimum penalties, which can be significant. You’ll generally also be charged a failure-to-pay penalty, which starts at .5% of the tax reported but unpaid and depends on certain circumstances. Learn more about penalties.