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Three days after the 2022 tax season began, an overwhelmed IRS suspends

some notices to taxpayers


The agency is trying to reduce correspondence with taxpayers, to avoid increasing the backlog of returns. IRS Commissioner Chuck Rettig and Treasury Department officials warned that the 2022 tax season would bring "enormous challenges." That prophecy is already coming true. Tax season opens on Monday. Just three days later, the IRS announced it was suspending the mailing of certain automated notices due to a delay in processing returns. The measure would prevent additional correspondence with taxpayers that would only increase the paper jam and potentially prevent even more stress for taxpayers.



IRS delays led to some early collection notices As of December 31, the IRS had 6 million unprocessed individual returns, including tax year 2020 returns. The agency did not provide a detailed list of the notices it would suspend, referring only to one type of letter, sent to taxpayers when the IRS has credited payments but has no record of tax filing. "Taxpayers who get a notice from the IRS are often petrified," said Roger Harris, president of Padgett, a Georgia-based accounting firm. “All they want is the ability to find out what happened. But when they can't get that help, it only adds to their frustration and panic." Many taxpayers have been receiving what is called a "CP80 Notice." Taxpayers who have already filed a return are instructed to send a newly signed copy to the address on the notice. Obviously, this address has alarmed those taxpayers who conclude that their original returns are probably sitting in a pile in some IRS office waiting to be processed. Wouldn't mailing another return cause more confusion?


It could certainly make people anxious. In a letter shared with me, a taxpayer sent a check for over $18,000 with the return only to receive the following response from the IRS: “If you don't file a return or contact us, you may lose this credit. The Internal Revenue Code establishes strict deadlines for the return or transfer of credits”. That wording would scare me. In a secondary thread on Reddit dedicated to IRS news and taxpayer disputes, several people sought advice after receiving a CP80 notice. “I mailed in my April 2021 tax return but paid what I owed online,” one Reddit user wrote. “Now of course I have no idea if they got my refund. Should I [mail] my tax return or wait another 2 months to see if they finally process the first one? I don't want to lose my rather large payment credit. Knowing my luck if I sent a copy they would process them both and tell me I owe double.” Another wrote: “Man if the IRS is so backed up why did they send out all these auto generated forms? Inconvenience for everyone, including the IRS representatives who have to handle all these calls.”


Perhaps the IRS finally realized the absurdity of the request for more paperwork. "In many situations, the tax return may be part of our current paper tax inventory and simply has not been processed," the agency statement said. "Stopping these letters, which could otherwise have been sent to thousands of taxpayers, will help avoid confusion." IRS wants to scan your face Lawmakers and tax professionals are pushing the IRS to do more to help anxious taxpayers. Members of Congress sent Treasury Secretary Janet Yellen a letter requesting tax relief. "Recognizing the extraordinary challenges of the COVID-19 pandemic, in addition to the IRS operating with outdated technology and a limited budget, we find the current situation alarming," the letter said. Among the lawmakers' list of recommendations was a request that the IRS pause automated collections until at least 90 days after the April 18 tax deadline. Given the severity of the return processing backlog, it makes sense for the IRS to offer a "reasonable cause" penalty waiver without individuals justifying the request, argues the American Institute of Certified Public Accountants. , AICPA). Under this type of exemption, the IRS says it will consider a good reason for not filing a tax return or not paying the taxes due.


Perhaps the IRS finally realized the absurdity of the request for more paperwork. "In many situations, the tax return may be part of our current paper tax inventory and simply has not been processed," the agency statement said. "Stopping these letters, which could otherwise have been sent to thousands of taxpayers, will help avoid confusion." IRS wants to scan your face Lawmakers and tax professionals are pushing the IRS to do more to help anxious taxpayers. Members of Congress sent Treasury Secretary Janet Yellen a letter requesting tax relief. "Recognizing the extraordinary challenges of the COVID-19 pandemic, in addition to the IRS operating with outdated technology and a limited budget, we find the current situation alarming," the letter said. Among the lawmakers' list of recommendations was a request that the IRS pause automated collections until at least 90 days after the April 18 tax deadline. Given the severity of the return processing backlog, it makes sense for the IRS to offer a "reasonable cause" penalty waiver without individuals justifying the request, argues the American Institute of Certified Public Accountants. , AICPA). Under this type of exemption, the IRS says it will consider a good reason for not filing a tax return or not paying the taxes due.



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