A coalition of 11 stakeholders teams from the tax practitioner neighborhood are urging the IRS to take motion to scale back pointless burdens for taxpayers and practitioners through the upcoming submitting season. IRS workers are at present processing a gathering request in order that the practitioner teams can elaborate on their suggestions and reply on to any questions the IRS could have.

The group contains these representing Latinos, Blacks, small companies, and low-income taxpayers. Along with the American Institute of CPAs, the group contains of Latino Tax Professional, the Nationwide Affiliation of Black Accountants, the Nationwide Affiliation of Enrolled Brokers, the Nationwide Affiliation of Tax Professionals, the Nationwide Convention of CPA Practitioners, the Nationwide Society of Accountants, the Nationwide Society of Black CPAs, the Nationwide Society of Tax Professionals, Padgett Enterprise Providers, and Prosperity Now.

In a letter, the coalition urges the IRS to handle the scenario confronted by practitioners and taxpayers through the submitting season forward.

“At the moment, the IRS nonetheless has an unprecedented variety of unprocessed returns compared to years earlier than the pandemic,” they acknowledged within the letter. “Consequently, the IRS sends quite a few mistargeted notices, liens and levies. Moreover, the IRS is barely answering 9% of all calls, and solely 3% of calls concerning particular person revenue tax returns, which prevents taxpayers from resolving these simple points.”

To scale back the necessity for taxpayers and tax professionals to speak with the IRS as a result of persistent and inaccurate notices, the coalition recommends that Treasury and the IRS ought to:

  • Discontinue automated compliance actions till the IRS is ready to commit the mandatory assets for a correct and well timed decision of the matter.
  • Align requests for account holds with the time it takes the IRS to course of any penalty abatement requests.
  • Supply an affordable trigger penalty waiver, just like the procedures of first-time abate, or FTA, administrative waivers, with out affecting the taxpayer’s eligibility for FTA in future tax years.
  • Present taxpayers with focused aid from each the underpayment of estimated tax penalty and the late cost penalty for the 2020 and 2021 tax 12 months.

The letter famous that the COVID-19 pandemic has created monumental challenges for taxpayers, tax professionals and the IRS: “It’s time to take steps to ameliorate the scenario. Implementing affordable penalty aid measures, that the IRS can provide instantly, are obligatory to assist not solely taxpayers and tax professionals but additionally the IRS throughout these difficult instances.”

The Inner Income Service constructing in Washington, D.C.

Bloomberg through Getty Pictures

“The issues are highlighted by the truth that the IRS is sending out notices to taxpayers that did pay and actually their cost has cleared,” famous Stephen Mankowski, tax chair at NCCPAP, one of many members of the coalition. “There are such a lot of circumstances the place individuals have responded however are getting automated letters placing precise levies and liens towards individuals, and in the event that they attempt to name they’ll by no means get by means of. The IRS is to this point behind that they’ll’t get to all the points.”

A lot of this stems from the truth that the IRS is totally underfunded, Mankowski noticed: “We help giving enough funding to the IRS.”

Roger Harris, president of Padgett Enterprise Providers, one other member of the coalition, agreed. “Underfunding of the IRS is a actuality. The pandemic made a foul drawback worse,” he mentioned.

It’s been advised {that a} moratorium on penalties will assist the routine offenders, however that’s unavoidable, in accordance with Harris: “Anytime you will have penalties decreased there’s the potential that some unhealthy actors will profit. However is that sufficient of a purpose to not grant it to the bulk who’re making an attempt to play by the principles?”

“It actually comes right down to a query of equity,” he mentioned. “Taxpayers are being requested to reply in a well timed method and but the service isn’t responding in the identical well timed vogue. Taxpayers and practitioners shouldn’t be held to the pre-pandemic normal till the IRS can function in the identical method. If I get a letter that I’ve to reply to inside 30 days and I bust my tail to reply in time, why does the service take perpetually, and I can name and never get a solution — why is it simply my drawback? Let’s acknowledge that these will not be regular instances, and all of us want some breaks.”

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