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Pressure is mounting in Congress for the IRS to provide relief to taxpayers

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The mountainous paperwork problem has been compounded by the underlying issues that have plagued the IRS for years: budget cuts, shrinking workforces, and outdated technology.

“While we recognize that no single action will solve the problems resulting from the difficulties the IRS has faced in the administrations of both political parties, these measures would provide our voters with greater certainty as we enter tax filing season. this year,” wrote the lawmakers, who numbered 171 in total.

They asked Rettig for a series of measures to help alleviate what they called an “alarming” situation. The IRS could do this without congressional approval since no legal action is needed to obtain administrative relief.

The prescription: Recommendations include stopping automated penalty collection from now until at least 90 days after April 18, this year’s filing deadline for most personal tax returns.

Lawmakers also want the IRS to:

  • Delay penalty collection from individuals waiting for the agency to process active and pending penalty reduction requests.
  • Simplify the process for pandemic-affected taxpayers to show reasonable cause for reduced penalties, without the need for written correspondence.
  • Waive penalties for taxpayers who paid at least 70% of the taxes they owed in the past two years.
  • Speed ​​up the processing of amended declarations.
  • Respond more quickly to inquiries from Congressional caseworkers and the Taxpayer Advocate Service.

The Taxpayer Advocate Service or TAS, a division of the IRS intended to help filers with their individual problems, is overloaded with requests and no longer accepting cases that deal only with the processing of amended returns. TAS also stopped receiving referrals from congressional district offices, congressional aides said.
“This has made it impossible for frustrated taxpayers to find help,” the lawmakers wrote. “When our constituents can’t get help from the IRS and CAS, they contact us, and our hands are tied at this point as well.”

A growing problem: Lawmakers, taxpayers and preparers have asked the IRS for various forms of penalty relief dating back to 2020. More recently, a coalition of a dozen tax professional associations delivered the same message to Rettig on behalf of taxpayers. racial and ethnic minorities, small businesses and low-income taxpayers.

“We call on the IRS to heed the unified voice of our coalition of stakeholders and members of Congress to provide taxpayer relief now,” the coalition said.

The final tax filing season just started on Monday, with growing concerns about the existing backlog and other worries that could confuse taxpayers.

No extension yet: Rettig and Treasury Department officials said they are not currently considering extending the filing deadline beyond April 18, although the IRS has extended the past two tax filing seasons due of the pandemic.

Most tax groups have yet to ask the IRS to extend the deadline this year, although some are already recommending that if it does happen, the IRS should make the announcement as soon as possible to mitigate the taxpayer anxiety.

According to recent IRS and CAS updates, the IRS backlog included 6 million original individual returns as of December 31 and 2.3 million amended individual returns as of January 8; 1.1 million unprocessed quarterly tax returns and approximately 440,000 amended quarterly tax returns as of January 19; and nearly 5 million other pieces of taxpayer correspondence as of mid-December.

Pressure is mounting in Congress for the IRS to provide relief to taxpayers

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