How long does it take the IRS to cash checks, typically?

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SSSS
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How long does it take the IRS to cash checks, typically?

Postby SSSS » Thu Apr 07, 2011 7:26 pm

If I mail a check to the IRS on April 17th, what would be a reasonable expectation for when it would hit my bank?

I've got the money in the account already, but I'm not sure exactly how long the bank freezes deposits.

Also, if the worst happened and the check was declined, roughly how long would it take for the cops to show up?

hsv_climber
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Postby hsv_climber » Thu Apr 07, 2011 7:36 pm

Never?

http://www.usatoday.com/news/washington ... csp=34news

Q: Do I still have to file my taxes? What about my refund?
A: Tax returns still would be due by April 18. Returns filed electronically (about 70% of the total) would be processed; paper returns would not. Internal Revenue Service walk-in centers would close.

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SSSS
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Postby SSSS » Thu Apr 07, 2011 7:39 pm

Hmm, I already e-filed and the return was accepted, but still have to mail the check, so I'm not sure if that applies or not. Maybe I should have paper filed, but my printer was low on toner.

Also, even if they stop processing paper returns, I bet they continue opening envelopes & cashing checks.

hsv_climber
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Postby hsv_climber » Thu Apr 07, 2011 7:47 pm

It is not clear either they would be opening envelopes or not since they won't be processing returns. It most likely means that there won't be people there to open envelopes.

But thing to consider - even if the shutdown will be short, i.e. a few days, there will be a backlog of envelopes, which might slow down IRS processing center and might slow the process of cashing your check.

Hard to predict.

sscritic
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Postby sscritic » Thu Apr 07, 2011 7:50 pm

I mailed my estimated taxes on Monday and my check cleared the bank on Wednesday. My guess is that it was delivered to the IRS on Tuesday.

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grabiner
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Re: How long does it take the IRS to cash checks, typically?

Postby grabiner » Thu Apr 07, 2011 7:50 pm

SSSS wrote:If I mail a check to the IRS on April 17th, what would be a reasonable expectation for when it would hit my bank?

I've got the money in the account already, but I'm not sure exactly how long the bank freezes deposits.


This is what you need to check with your bank, and (if necessary) ask for an exception, which a small bank or credit union might grant. I always check about the hold when depositing a large check, as I usually intend to follow a large deposit with a large withdrawal (spending the money if it was a reimbursement, or buying a mutual fund if I don't have a need to spend the money).

Banks don't normally hold checks for very long, but there are certain exceptions such as checks over $5000 and new accounts.
David Grabiner

GDBryan
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Postby GDBryan » Thu Apr 07, 2011 7:53 pm

I sent in a quarterly payment on January 18 and it was cashed by the 20th.
(I think it's a conspiracy with the Post Office... :wink:)

sscritic
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Re: How long does it take the IRS to cash checks, typically?

Postby sscritic » Thu Apr 07, 2011 8:02 pm

grabiner wrote:Banks don't normally hold checks for very long, but there are certain exceptions such as checks over $5000 and new accounts.

Holds are governed by Regulation CC, but the bank can make exceptions.

http://www.federalreserve.gov/pubs/regcc/regcc.htm

Here is an example:
Customer Palmer deposits a $10,000 nonlocal check payable to him with a teller at 10:00 a.m. on Monday the 1st. When must the funds be made available?
Answer: The first $100 must be available by Tuesday the 2nd. Because the check is nonlocal, the remaining amount must be available by the fifth business day, which is Monday the 8th; however, you may choose to hold the amount over $5,000 under a “large deposit” exception. If you choose this option, you must give the customer a hold notice when the deposit is received (or not later than the close of the business day on Tuesday if the decision to delay availability is made after the time of deposit), and you must provide $100 by Tuesday the 2nd, an additional $4,900 by Monday the 8th, and the remaining $5,000 by Tuesday the 16th.
http://www.federalreserve.gov/pubs/regcc/examples.htm

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HueyLD
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Re: How long does it take the IRS to cash checks, typically?

Postby HueyLD » Thu Apr 07, 2011 8:07 pm

SSSS wrote:If I mail a check to the IRS on April 17th, what would be a reasonable expectation for when it would hit my bank?

I've got the money in the account already, but I'm not sure exactly how long the bank freezes deposits.

One thing others have not mentioned. If you are a good customer of the bank, they can always make an exception for you.

Also, if the worst happened and the check was declined, roughly how long would it take for the cops to show up?

No fear!! The IRS will just add penalty and interest to your unpaid balance. No big deal and no jail time.

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Postby scrabbler1 » Thu Apr 07, 2011 9:42 pm

I mailed my state and federal tax returns last Saturday from the local post office here in New York. The state tax check cleared Tuesday, the federal check cleared yesterday (Wednesday).

A year or two ago, my ladyfriend used outdated checks mailed to her by mistake from her bank after she needed to have her account closed and a new account number issued. [I knew about this and wished I had insisted on checking the routing number to see that it matched her new account number, oh well.]

She does most of banking on line and those paper checks were to hold her over until she soon received new paper checks had the bank not screwed it up. Anyway, both tax payment checks got returned ("Account closed") but she was not charged any fees for that by either agency or the bank (and she chewed out her bank pretty good, too) once she explained what happened. It was still a week or so before April 15th so as long as she sent them new checks by then she would not face any late fees. She did that and all was okay.

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Postby Anon1234 » Fri Apr 08, 2011 1:56 am

scrabbler1 wrote:I mailed my state and federal tax returns last Saturday from the local post office here in New York. The state tax check cleared Tuesday, the federal check cleared yesterday (Wednesday).


+1
3 days via 1st class US Post for me too.

SunDevil
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Postby SunDevil » Fri Apr 08, 2011 7:50 am

sscritic wrote:I mailed my estimated taxes on Monday and my check cleared the bank on Wednesday. My guess is that it was delivered to the IRS on Tuesday.


It's amazing how efficient the government can be when it comes to cashing my checks... not so much with refunds though :roll:

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Postby scrabbler1 » Fri Apr 08, 2011 8:14 am

SunDevil wrote:
sscritic wrote:I mailed my estimated taxes on Monday and my check cleared the bank on Wednesday. My guess is that it was delivered to the IRS on Tuesday.


It's amazing how efficient the government can be when it comes to cashing my checks... not so much with refunds though :roll:


Besides what I posted above, I was amazed at how fast my check cleared 2 years ago when I had to send in a large check ($46k) for taxes on a late-year (2008), lump-sum distribution. I mailed it from my local post office on Thursday, April 2nd (2009) and by the end of business on Monday, April 6th it had already hit my account.

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Postby Steelersfan » Fri Apr 08, 2011 8:25 am

SunDevil wrote:
sscritic wrote:I mailed my estimated taxes on Monday and my check cleared the bank on Wednesday. My guess is that it was delivered to the IRS on Tuesday.


It's amazing how efficient the government can be when it comes to cashing my checks... not so much with refunds though :roll:


The checks are actually handled by banks that the IRS contracts to open the mail, process the check and send the payment on to the IRS itself. That's why the amount gets taken out of your account so fast.

It's fast, efficient and cheap.

We all probably like the efficient and cheap parts. The fast, not so much.

sscritic
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Postby sscritic » Fri Apr 08, 2011 8:26 am

Remember that the physical check doesn't have to come to your bank for clearing, only an image (see Check Clearing for the 21st Century Act aka Check 21 Act). That is why you can make a deposit with a picture of a check taken with your camera phone that is uploaded to your bank.

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Postby centrifuge41 » Fri Apr 08, 2011 8:26 am

SunDevil wrote:It's amazing how efficient the government can be when it comes to cashing my checks... not so much with refunds though :roll:
I had a refund for both federal and for state. I efiled federal because my software package included the efiles. I paper filed state because my software package did not include state efile.

Guess what? My paper filed state return was posted to my bank account in 2 days! Obscenely fast! My federal return took a bit longer, but it came through within about 2 weeks or so.

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Re: How long does it take the IRS to cash checks, typically?

Postby Grt2bOutdoors » Fri Apr 08, 2011 8:27 am

SSSS wrote:If I mail a check to the IRS on April 17th, what would be a reasonable expectation for when it would hit my bank?

I've got the money in the account already, but I'm not sure exactly how long the bank freezes deposits.

Also, if the worst happened and the check was declined, roughly how long would it take for the cops to show up?


Give it 2 days to arrive at the operations center, 1 day to be deposited - say 3-4 days maximum. Uncle Sam has to pay the guy from 30 years ago, so will not sit on checks.

Jacobkg
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Postby Jacobkg » Fri Apr 08, 2011 9:18 am

Tax returns with checks enclosed are sent to a different address code than returns without checks. In my experience, they cash those checks blazing fast (a day or two after receipt).

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Re: How long does it take the IRS to cash checks, typically?

Postby Chuck » Fri Apr 08, 2011 9:26 am

sscritic wrote:
grabiner wrote:Banks don't normally hold checks for very long, but there are certain exceptions such as checks over $5000 and new accounts.

Holds are governed by Regulation CC, but the bank can make exceptions.

http://www.federalreserve.gov/pubs/regcc/regcc.htm

Here is an example:
Customer Palmer deposits a $10,000 nonlocal check payable to him with a teller at 10:00 a.m. on Monday the 1st. When must the funds be made available?
Answer: The first $100 must be available by Tuesday the 2nd. Because the check is nonlocal, the remaining amount must be available by the fifth business day, which is Monday the 8th; however, you may choose to hold the amount over $5,000 under a “large deposit” exception. If you choose this option, you must give the customer a hold notice when the deposit is received (or not later than the close of the business day on Tuesday if the decision to delay availability is made after the time of deposit), and you must provide $100 by Tuesday the 2nd, an additional $4,900 by Monday the 8th, and the remaining $5,000 by Tuesday the 16th.
http://www.federalreserve.gov/pubs/regcc/examples.htm

Yes, my old bank (BofA) enforced this rigidly. It was on their deposit receipts the amount and dates of the releases. The local credit union I now use only holds amounts over $5000, and they don't if I say "please don't." (They made a $40,000 check immediately available when I was buying my house. Nice folks.)

In both cases, the amount of the hold, and the release date are very clearly stated. If your bank doesn't do this, they suck.

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Postby HomerJ » Fri Apr 08, 2011 9:32 am

Fairly fast... They processed my check in about 4-5 business days.

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Postby Grt2bOutdoors » Fri Apr 08, 2011 9:42 am

rrosenkoetter wrote:Fairly fast... They processed my check in about 4-5 business days.


I must be a procrastinator - I'm not sending it in any earlier than it is due.

P.S. Waiting for a tax statement I just received is my real reason.

On another sidetrack - for those who took the Roth Conversion exercise and deferred paying tax until 2011 and 2012 - do you have to pay estimated taxes based on the additional tax due or can I wait if not adjusting my tax withholding levels?

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Postby sscritic » Fri Apr 08, 2011 9:59 am

GRT2BOUTDOORS wrote:On another sidetrack - for those who took the Roth Conversion exercise and deferred paying tax until 2011 and 2012 - do you have to pay estimated taxes based on the additional tax due or can I wait if not adjusting my tax withholding levels?

I would assume the usual rules apply. There are three safe harbors (or three and a half): the $1000 harbor, the 100% (or 110%) of last year harbor, and the 90% of this year harbor. That means for 2011, you can safe harbor by withholding 100% (or 110%) of your 2010 tax, even if the 2011 tax will be much higher. That also means you will have to step it up to the 2011 tax for the year 2012.

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Postby grabiner » Fri Apr 08, 2011 9:27 pm

GRT2BOUTDOORS wrote:
rrosenkoetter wrote:Fairly fast... They processed my check in about 4-5 business days.


I must be a procrastinator - I'm not sending it in any earlier than it is due.

P.S. Waiting for a tax statement I just received is my real reason.

On another sidetrack - for those who took the Roth Conversion exercise and deferred paying tax until 2011 and 2012 - do you have to pay estimated taxes based on the additional tax due or can I wait if not adjusting my tax withholding levels?


This should work the same as any other source of income. If you know you will owe tax on $3650 of income in 2011 which is not withheld, it doesn't matter whether that income is from a 2010 IRA conversion, a 2011 IRA conversion, or a bank account; you need to claim one fewer withholding allowance, or pay estimated tax, in order to get the right amount of tax paid. If your current withholding will cover your needs (and you do not claim more allowances than you are allowed to claim), you do not need to change it.
David Grabiner


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