How do IRS’s 2022 challenges and positions affect you?
IRS challenges and positions affect you?
It has a backlog of unprocessed filings…From last year: 6 million 2020 Forms 1040, many of which were mailed in and requested refunds. 2.3 million amended returns filed on Form 1040-X. Plus, millions more in business and payroll tax returns. Agency officials can’t even provide a time frame for when returns will be processed, or refunds sent out. All they say is don’t file a second return or contact IRS.
The Service isn’t timely responding to written correspondence from taxpayers or tax professionals who are representing their clients. Mailings continue to pile up or remain unanswered because of COVID and social distancing restrictions. IRS’s response time is dismal, far greater than its targeted 30- to 45-day goal.
To make matters worse, it’s continuing to send out automated notices, sowing confusion among taxpayers. For example, some people who sent in documents tin response to an IRS letter are getting erroneous notices from the agency, some of which even assess penalties for failure to timely respond. Other taxpayers who requested penalty abatement or other tax relief in writing now find themselves embroiled in IRS’s automated collection process, through no fault of their own.
The Service is offering very narrow relief. It is suspending some notices, but only in cases in which it has credited taxpayers’ accounts for payment sent in but there is no record of a 2020 return being filed. IRS recognizes that these people likely filed paper 1040s by mail, and those filings have not yet been processed.
But lawmakers, preparers and taxpayer advocacy groups want more. A coalition of tax preparer organizations is asking IRS to provide limited relief from the underpayment penalty, temporarily cease automated compliance actions, and put collection holds on accounts of taxpayers who request penalty relief, among other things. Approximately 200 House Democrats and Republicans echo these recommendations and are putting pressure on the Service to act fast.
IRS is promoting online accounts for individuals. Here are some features: You can check to see if you owe back taxes, and the amount of interest and penalties. You can make a payment online and review the various payment plan options. You can view the stimulus check amount and the monthly child tax credit payments that IRS says you received, as well as the total estimated tax payments that you made.
But new security measures for accessing the accounts are getting flak, especially the need for individuals to submit a driver’s license or other photo ID and to take a selfie with a smartphone or computer webcam. These procedures also apply to individual taxpayers who request an online installment agreement, use IRS’s Get Transcript web tool, or who seek an identity protection PIN. Opponents of the ID.me facial recognition technology say the process is invasive. The intense pushback is causing IRS to explore other ways to increase online security.