The National Association of Tax Professionals (NATP), in conjunction with 10 other organizations in the tax community, have sent a letter to the IRS requesting relief for taxpayers.
Specifically, the letter references the unprecedented current number of unprocessed returns in comparison to the years before the pandemic. Consequently, the IRS is sending numerous mistargeted notices, liens and levies. In addition, the IRS is only answering 9 percent of all calls and only 3 percent of calls regarding individual income tax returns, which prevents taxpayers from resolving these straightforward issues.
Accordingly, the NATP and the other organizations request that that the IRS consider the following measures to bring immediate relief to taxpayers and reduce the backlog during this tax filing season:
- Discontinue automated compliance actions until the IRS is prepared to devote the necessary resources for a proper and timely resolution of the matter.
- Align requests for account holds with the time it takes the IRS to process any penalty abatement requests.
- 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 pandemic has created enormous challenges for taxpayers, tax professionals and an underfunded and short-staffed IRS. The organizations exhort the IRS to take steps to ameliorate the situation. They claim that implementing reasonable penalty relief measures that can be offered immediately is necessary to help not only taxpayers and tax professionals, but also the IRS itself during these challenging times.
What happens next? The tax community is looking forward to the IRS’ response. We will report on any significant developments.