The IRS is backlogged in many of their processing functions, and it is causing serious problems for many of our clients.
Some taxpayers still have not received their 2020 refunds for returns they filed back in April. Others are having their 2020 refunds reduced but getting no explanation why.
An even bigger problem is the IRS backlog in processing letters from taxpayers. We currently have about 25 open cases of the IRS sending our clients bills for adjustments to their tax returns that were not entirely correct. We have written letters to the IRS, attaching documents to dispute the assessments, but the IRS is currently about five to six months backlogged in processing their correspondence. Meanwhile second and third bills are being sent to taxpayers with additional penalties and interest that could have been eliminated if they would simply process our letters. Unbelievable!
In the past we had the option of calling the IRS and faxing their representatives our documents ….no longer an option. Most IRS personnel are working from home now and cannot receive faxes. Many are no longer answering their phones. A recently released report by the Taxpayer Advocate’s office reported that only 3 percent of all calls to the IRS this past tax season were answered by a human. The other 97 percent were met with the all too familiar message that “due to peak call volume” the caller needed to call back at another time.
If we do reach a human when we call the IRS, we must prove to them we are authorized to discuss a taxpayer’s information with them. Our firm does this by faxing the IRS a signed power of attorney. The problem is the IRS is taking as long as a month to process the power of attorney forms we submit. Prior to COVID this process used to take a few hours.
We currently have four clients that have pending settlement offers with the IRS. These offers are known as “Offers in Compromise.” It is a wonderful program that allows taxpayers to get a new start by settling their balance with a negotiated reduced amount. These offers are taking over a year to process. I received a call last week from a client whose spouse had their paycheck garnished for prior year taxes owed. This client has had an offer pending for over a year! This is so unfair.
The IRS has had additional programs given to them to administer without increasing their workforce. In 2020 and 2021 three rounds of COVID stimulus checks were piled on. The IRS workforce is mostly working from home with limited access to databases and documents they would normally have available to them.
This situation is difficult. Please know we are doing our best to assist our clients during this crisis. We have written many letters that have not been processed and left even more messages that have not been returned. Your patience and understanding are very much appreciated.
