A push by the IRS to process backlogged tax returns, including by temporarily reassigning some employees to the effort, "are positive steps in the right direction," said AICPA President and CEO Barry Melancon, CPA, CGMA.
"We are glad that the IRS seems to be listening and responding to the collective frustrations of all taxpayers," Melancon said in a statement Thursday.
"However," he added, "we must urge the Service to move as quickly as possible to offer reasonable measures of relief, as we are already in the beginnings of tax busy season."
Those measures include all the relief proposed previously by the AICPA and the Tax Professionals United for Taxpayer Relief Coalition, of which the AICPA is a member, Melancon said.
Those recommendations "are actions that we believe the IRS can legally take right now to provide immediate relief to taxpayers," he said. "Time is of the essence."
The coalition wrote a letter to IRS Commissioner Charles Rettig and Lily Batchelder, assistant secretary for tax policy at Treasury, that was copied to members of the Senate Finance Committee and the House Ways and Means Committee last month outlining what it says are urgently needed relief measures, given the now-commenced tax filing season. A news conference by the coalition followed, providing background and explanations of the recommendations.
Next Tuesday, Feb. 8, at 1 p.m. ET, the coalition will host a public forum to discuss IRS services issues and solutions and to address practitioners' questions. It is open to tax practitioners, taxpayers, and others. Participants will be able to ask coalition members questions and describe their own experiences with the IRS.
The IRS's plan to reassign certain employees was outlined in an internal IRS memo on Wednesday from Rettig, who thanked employees for working hard to meet "unprecedented challenges" in the past two years.
Rettig noted that the pandemic and resulting emergency closings of some IRS centers impeded its ability to process taxpayer correspondence and amended returns. As a result, the IRS's accounts management function is already challenged as the 2022 filing season is underway, Rettig said.
Consequently, an "inventory surge team" of experienced employees who have formerly worked in accounts management within the past two fiscal years will be shifted back there, possibly for the remainder of the current fiscal year, which extends through the end of September 2022.
The IRS also announced Friday that certain of its Taxpayer Assistance Centers will be open on a few Saturdays during and right after this year's filing season (Feb. 12, March 12, April 9, and May 14). Taxpayers may receive help with their returns without making an appointment.
Previously, the IRS announced it would also modify its operations, including by not issuing some automated notices to taxpayers and forbearing from taking related collections actions, such as where it has credited taxpayers for payments but has no record of the corresponding tax return, which could still be in backlogged inventory. During the pandemic, the IRS said, it has already redeployed staff and implemented "experienced surge teams," as well as requiring overtime and transferring work among service centers.
The coalition's recommendations are:
- Discontinue automated compliance actions until the IRS is prepared to devote the necessary resources for a proper and timely resolution of the matter;
- Align requests for account holds with the time it takes the IRS to process any penalty abatement requests;
- Offer a reasonable-cause penalty waiver, similar to the procedures of a first-time abatement (FTA) administrative waiver, without affecting the taxpayer's eligibility for FTA in future tax years; and
- Provide taxpayers with targeted relief from both the underpayment-of-estimated-tax penalty and the late-payment penalty for the 2020 and 2021 tax years.
The coalition members are the AICPA, Latino Tax Pros, National Association of Black Accountants, National Association of Enrolled Agents, National Association of Tax Professionals, National Conference of CPA Practitioners, National Society of Accountants, National Society of Black Certified Public Accountants, National Society of Tax Professionals, Padgett Business Services, the Diverse Organization of Firms, H&R Block, and Prosperity Now.
The AICPA continues to advocate for better IRS services; visit the webpage describing AICPA advocacy efforts to learn more.
— To comment on this article or to suggest an idea for another article, contact Paul Bonner at Paul.Bonner@aicpa-cima.com.
