IRS CAN'T FIND CHECKS FROM 1,800 TAXPAYERS
By Dolores Kong
The Boston Globe
When some folks tell the federal government the
check's in the mail, they really mean it.
The Internal Revenue Service is now acknowledging that
checks from about 1,800 taxpayers in New England and
upstate New York sent in April have disappeared.
What happened is still a mystery.
David Green, for example, said he sent a four-figure
check as an estimated tax payment to the IRS by the
mid-April filing deadline. He noticed a few weeks ago
that it still hadn't cleared on his latest bank
"I called up my accountant," said the 74-year-old
Chestnut Hill resident. "He told me I'd better call
this number for the IRS right away." The agency told
him to stop payment and send a replacement check and
supporting documentation, Green said. It also said he
could be reimbursed for the stop check fee.
So how did the checks get lost? The IRS admits it
doesn't know and is investigating. The problem centers
on checks sent to an IRS post office box in
Pittsburgh, to be processed through a Mellon Bank
The IRS confirmed this week that checks from about
1,800 taxpayers are missing. In early June, the total
of confirmed missing checks numbered about 650. Two
weeks ago, it had climbed to about 1,500.
Green is worried that there are others in his
situation who don't know it. "It's not just me," he
said, urging taxpayers to review their bank statements
to make sure payments have cleared. "There are many
people who do not realize this. There could be
thousands of people in Massachusetts."
The problem involves a limited number of taxpayers who
sent checks near the filing deadline to the IRS post
office box in Pittsburgh, along with certain 1040s
(not 1040A or 1040EZ forms), estimated tax payment
forms, or tax filing extension forms, according to IRS
spokesman Anthony Burke.
Tax payments sent to that post office box are normally
picked up by employees or couriers from Mellon Bank in
Pittsburgh and brought to a processing facility at the
bank for deposit into the US government's account,
according to Burke. Last year, 5.6 million payments
were processed through this system. "I could not
categorically say we've never had a problem with the
lockbox system. In general, it's a good program,"
The Treasury Department's inspector general for tax
administration launched an investigation after some
taxpayers told the IRS in May their checks hadn't
cleared, Burke said. "The matter is still under
review. They haven't wrapped up the case yet," he
Mellon Bank spokesman Ken Herz said a number of
scenarios are being looked into, although he couldn't
comment on them while the investigation is ongoing.
"It's very unlikely that someone stole 1,000 items.
Our lockbox operations are conducted under very tight
security procedures. No fraudulent checks have turned
up or anything like that. It's a pretty complicated
But Herz added the missing checks can't be explained
by something as simple as a lost mail sack. "It's not
like a sack is missing," he said. "That would be very
easy to investigate."
Herz also wondered how the IRS could confirm 1,800
checks are missing "if we don't know for sure if a
check was sent. Is it possible that someone didn't
file a return, calls up and says, `My check is
missing'? There is no way to confirm it."
Eugene S. Tarsky, a certified public accountant in
Norwood, knows one client's check is among those
missing because it was sent certified mail and the
return receipt came back - yet the check has still not
cleared through the client's bank account two months
"We are talking a five-figure check. We knew the
balance in the account was too high, and could see the
check hadn't been cleared," said Tarsky.
The other indication Tarsky has that the check was
received: A letter that accompanied it was sent back
bearing an IRS stamp, acknowledging not only receipt
but also the amount of the check.
New England and upstate New York taxpayers who sent
their payments directly to the IRS center in Andover,
Mass., should be OK, according to IRS spokesman Burke.
Concerned taxpayers should first review their bank
statements, according to Burke. If checks sent by the
April filing deadline haven't cleared yet, they should
call the IRS at (800) 829-1040. The IRS will review
its records and follow up with a letter as well as a
copy of Form 8546, for reimbursement of any stop check
"I feel confident in saying that taxpayers who are
affected by this, who did in fact make this payment
and sent in the return before the April filing
deadline, and who contacted us, will not be charged
interest and penalty," said Burke.
There's another reason taxpayers should make sure
their payments for tax year 2000 have been received by
the IRS. The $300 to $600 "quick rebates" that many
are counting on, a result of the new tax law signed by
President Bush, won't be sent out unless the agency
has processed a taxpayer's 2000 tax return.
Otherwise, the IRS gets to tell the taxpayer the
proverbial "the check's in the mail."