Federal Refund Processing vs "No record of a processed tax return"

I e-filed my Fed and State taxes on May 16 and received texts saying that both were accepted. I received my State refund in about a week.

 

It's been 2 months and no federal refund yet. IRS.gov indicates that the refund is being processed. When I opened an account online with irs.gov, I found an IRS letter dated July 14 stating that "As of the date of this letter, we have no record of a processed tax return for tax period ending Dec 2020."  

 

How can I correct this issue?  Are they just busy or did they not get my tax return?  Can I file again?  Will I be penalized for late filing?  This has never happened before and I have been using TurboTax for many years.