Representatives of organizations of tax professionals and firms related their experiences in dealing with the IRS in an online forum Tuesday. Thousands of tax professionals and others logged in, filling long columns of chat and question sidebars with their own experiences and thoughts.
The hourlong session, titled "Is Help on the Way From the IRS for This Filing Season?" was sponsored by the Tax Professionals United for Taxpayer Relief Coalition, of which the AICPA is a member. Representatives of the other member organizations and firms explained in detail each of the coalition's four recommendations to the IRS. Leaders who are themselves tax practitioners illustrated the need for the Service to adopt the measures from their own dealings with it on behalf of their clients.
Organizers of the session said the scores of comments and questions in the chat and Q&A boxes would be read and questions addressed later in a webpage of frequently asked questions. They also invited others to send in questions to IRSservices@aicpa-cima.com.
Speakers told about their hours spent on hold trying to reach IRS customer service representatives. With the IRS having received at one point last year 1,500 phone calls per second — more than five times the annual average — the number of calls answered dropped to between 2% and 3% during the busiest time of the year.
Many of these calls could be avoided if the IRS adopted one of the coalition's recommendations: to align requests for account holds with the time it takes the Service to process any related penalty abatement requests, said Stephen Mankowski, CPA, CGMA, co-chair of the National Conference of CPA Practitioners. As things stand now, the IRS may agree to extend the time before it takes a collection action, but usually only for a few weeks at a time, after which another extension is needed, he said.
"A large portion of these calls are from practitioners that need to call the IRS back to extend the hold time on the collection notices," Mankowski said.
Other potentially avoidable calls occur when a taxpayer needs information from his or her IRS account but is unable to complete the often-difficult process of setting up online access, he said.
Other speakers talked about clients' fears when receiving a levy or other collection notice without realizing that it was automatically — and too often recently, erroneously — generated.
"When they're getting them, they're probably the first person to read them," said Nina Tross, E.A., executive director of the National Society of Tax Professionals.
"I've had clients call me up and say, 'I'm about to lose my house,' and I say, 'OK, I'm not sure what generated that comment, but you're not about to lose your house, and send me whatever it is you received,'" Tross said.
That experience highlights another of the coalition's recommendations, that the IRS discontinue any automated compliance action until it can devote necessary resources to properly and timely resolve a matter.
Larry Gray, CPA, government relations liaison with the National Association of Tax Professionals, told of two situations from last year's filing season. In one, a taxpayer filed a return and paid taxes, then got a balance-due notice from the IRS for the full amount the taxpayer had just timely paid. Then came an assessment for penalties and interest.
"This is part of the backlog, creating more backlog, more penalties, more interest, and more confusion," Gray said.
Gray's other situation involved the March 2021 law change excluding a portion of unemployment benefits from taxpayers' 2020 income. A client who had filed a return including unemployment income was advised not to file an amended return. The client was unable to determine the status of a refund, which finally arrived in October 2021, with no explanation of the delay.
"Then, between Christmas and New Year's, they received an additional refund," Gray said. "Again, with no letter of explanation."
Beyond the recommendations for the IRS, solutions discussed mostly involved patience and persistence. Speakers emphasized a goal of helping the IRS as well as taxpayers, beleaguered as the Service has been.
That kind of mutual aid would result from another of the coalition's recommendations — that the IRS offer a reasonable-cause penalty waiver, similar to the procedures for a first-time abatement (FTA) administrative waiver, without affecting the taxpayer's eligibility for FTA in future tax years, said Ben Deneka, program manager, Agency and Industry Relations, with H&R Block.
An FTA can be processed in a streamlined manner, with minimal documentation, while a traditional reasonable-cause abatement typically requires much more correspondence and processing, Denaka pointed out. Making the latter more streamlined would allow the IRS to process more requests more quickly, while preserving the taxpayer's ability to use an FTA, which can be used only once in three years, in the future.
"It would also reduce the burden for that taxpayer," he said. "As well as for the IRS and for the practitioners. Really, for the entire tax ecosystem."
Carlos Lopez, E.A., founder and CEO of the Latino Tax Professionals Association, included "take care of yourself" among common-sense remedies, along with being prepared to wait on telephone hold with the IRS for an hour or two.
Others also suggested that tax professionals and taxpayers exercise resilience in light of trying times on several fronts at once, tax, after all, being only one of them.
"We've had many conversations about the amount of mental and emotional bandwidth that people have to be able to interact with the IRS," said Rebecca Thompson, vice president, Strategic Partnerships and Network Building, with Prosperity Now.
Interactions with the IRS can be stressful even in less trying circumstances, she noted.
"This situation completely exacerbates that, and it makes it increasingly difficult for taxpayers to be able to interact with the IRS and, really, to take care of the other aspects of their life," Thompson said. "Because they're caught up in the web that is working and dealing with the IRS right now."
The AICPA continues to advocate for better IRS services; visit the webpage describing AICPA advocacy efforts to learn more.
— To comment on this article or to suggest an idea for another article, contact Paul Bonner at Paul.Bonner@aicpa-cima.com.