COVID-19 surely has triggered a huge frustration to all taxpayers. The IRS has shut down and has been failing to operate normally. In response, many taxpayers have been suffering from unaddressed tax refunds, unanswered questions, and many other unfulfilled tax-related needs.
Some Taxpayers Could Not Receive Their Tax Refunds
The IRS office is swamped with more than 10 million pieces of unopened mails, including at least 4.7 million paper-filed tax returns. Paper-filed tax returns take up about 10% of all tax returns. USPS says that ever since March 24th, all mail sent out to IRS has been piling in a secured IRS facility until they reopen. This creates a problem for paper tax-filers, who are by no means able to receive their entitled refunds any time soon.
The struggle continues, as many electronic tax returns claiming refunds are being flagged erroneously by the IRS system. The system is designed to detect different types of fraudulent attempts as well as identity theft. However, the system incorrectly filters out and flags 50% of tax returns, inquiring additional documents to the taxpayers. Nonetheless, a very limited number of IRS agents are available in the office to go over those additional documents to clear the statuses of the returns, so taxpayers cannot receive the refunds, even those who are rightly entitled to the amount.
Because of this, low-income taxpayers are significantly impacted. A handful of them depends on tax refunds, as it accounts for a critical amount of their annual household income. Low-income families may be further impacted by the delayed issuance of stimulus checks.
Collection Notices Mailed Out Late
Additionally, the IRS recently mailed out 20 million notices late. Because some of these notices included timely information, the notices became outdated by the time they reached the taxpayers. The IRS included inserts that said not to worry about the late due dates. However, the notices became confusing to a notable number of recipients that overlooked the inserts.
Almost-Dead Telephone Lines
Taxpayers can’t get their tax questions answered. The IRS shut down Accounts Management telephone lines, so taxpayers are very limited in reaching live assistance. Currently, the only available resources for them are the website, automated telephone lines, and Taxpayer Advocate Service, of which employees are teleworking at home. Though the IRS has been slowly reopening its facilities, its services have limited capacity.
Halt On IRS Fieldwork Actions
The IRS stopped enforcement actions, such as liens and levies, by fieldwork revenue officers. They’ve also been delaying new automated and systemic liens and levies. The only area they’re still aggressively pursuing is non-filers.
Taxpayers are frustrated with the inability to ask questions and tax issues that remain unresolved. The IRS actions became severely limited, and taxpayers are having a difficult time receiving help on schedule. Nevertheless, with the July 15th tax deadline approaching, taxpayers need to file their taxes to avoid failure-to-file penalties and failure-to-pay penalties that snowball over time.
Beware that the IRS will reboot their planned investigation and collection activities right after July 15th. So, if taxpayers are struggling with tax debt or any other tax problems, they need to seek tax professionals who can help resolve their problems as soon as possible.
James Cha is a CPA and Certified Tax Resolution Specialist at Ace Plus Tax Resolution, providing solutions to taxpayers with IRS and state tax problems.
If you have any questions, email us at James@AcePlusTaxResolution.com. If you or someone you know needs help with tax debt problems, contact us or visit our website at https://aceplustaxresolution.com/.