Relief for Taxpayers for the 2022 Filing Season
Diverse Coalition of Stakeholders Urge Action from IRS to Mitigate Anticipated Challenges in Upcoming Tax Filing Season
Dear Assistant Secretary Batchelder and Commissioner Rettig:
The Coronavirus Disease 2019 pandemic (commonly known as “Coronavirus”) has created unforeseen and long-lasting difficulties for the Internal Revenue Service (IRS or “Service”), taxpayers and tax professionals alike. As we start a third tax filing season under a new variant of the Coronavirus, the Department of the Treasury (“Treasury”) and the IRS “are under no illusions that it’s going to go smoothly.”1 Though we appreciate that the IRS recognizes that it is frustrating for all, including the IRS, that the IRS is “unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs,” 2 the Service has not taken reasonable actions that would meaningfully reduce unnecessary burdens during this upcoming tax filing season.
Currently, the IRS still has an unprecedented number of unprocessed returns in comparison to years before the pandemic. Consequently, the IRS sends numerous mistargeted notices, liens and levies. Additionally, the IRS is only answering 9 percent of all calls and only 3 percent of calls regarding individual income tax returns3 which prevents taxpayers from resolving these straightforward issues. To reduce the need for taxpayers and tax professionals to communicate with the IRS due to the persistent and erroneous notices, Treasury and the IRS should:
- Discontinue automated compliance actions until the IRS is prepared to devote the necessary resources for a proper and timely resolution of the matter.4
- Align requests for account holds with the time it takes the IRS to process any penalty abatement requests.5
- Offer a reasonable cause penalty waiver, similar to the procedures of first time abate (FTA) administrative waiver, without affecting the taxpayer’s eligibility for FTA in future tax years.
- Provide taxpayers with targeted relief from both the underpayment of estimated tax penalty and the late payment penalty for the 2020 and 2021 tax year.
The Coronavirus pandemic has created enormous challenges for taxpayers, tax professionals and the IRS. It is time to take steps to ameliorate the situation. Implementing reasonable penalty relief measures, that the IRS can offer immediately, are necessary to help not only taxpayers and tax professionals but also the IRS during these challenging times.
We appreciate that IRS staff are already processing a meeting request so that we can elaborate on our recommendations and respond directly to any questions you may have. We look forward to meeting soon.
American Institute of CPAs (AICPA)
Latino Tax Professionals
National Association of Black Accountants, Inc. (NABA)
National Association of Enrolled Agents (NAEA)
National Association of Tax Professionals (NATP)
National Conference of CPA Practitioners (NCCPAP)
National Society of Accountants (NSA)
National Society of Black Certified Public Accountants, Inc. (NSBCPA)
National Society of Tax Professionals (NSTP)
Padgett Business Services