IRS Delay Comments

 On January 26, 2022, members of Congress sent a letter to the Secretary of the Treasury over  concerns  about  collections  when  the  IRS  has  yet  to  finish  processing  2020  tax  re-turns. In response to that letter, the IRS posted the following on their website on January 27, 2022.

The IRS has been working on important relief for taxpayers and tax professionals, implementing additional ways to help avoid confusion and provide import-ant, meaningful relief during this unprecedented pandemic, which has affected us all.  The IRS  entered  this  historic  pandemic  without  the  funding  that  it  needs  to  serve the American people. 

As part of our ongoing efforts during the pandemic, and  within  these  limited  resources,  the  IRS  has  aggressively  pursued  every  available option to better serve taxpayers this filing season. This includes, where appropriate and possible, requiring overtime by IRS employees, the redeployment  of  employees  between  functions,  transfer  of  inventories  among  posts  of  duty, deployment of experienced surge teams — all aimed at returning our processing  and  correspondence  inventories  to  a  healthy  level  and  improving  our  overall services to taxpayers and tax professionals. The IRS also developed and deployed important technology allowing employees to review and process tax returns filed with errors at many times the rate in the past. We are clearly not where we want to be at present. But our employees have been hard at work to develop innovative processes to expedite inventory reductions during the past year. Despite substantial progress thus far, another challenging filing season is ahead.

As  part  of  this  ongoing  effort  and  balancing  the  importance  of  protecting  the  interests of tax administration, the IRS has also been taking important steps to modify our operations and provide additional taxpayer relief. These efforts include suspending issuance of certain automated notices and related actions. We are looking at the suggestions that have come in, and we will continue modify and adjust our efforts going forward to help taxpayers and the tax community.

For  example,  we  have  already  decided  to  suspend  notices  in  situations  where  we have credited taxpayers for payments but have no record of the tax return being filed. In many situations, the tax return may be part of our current paper tax inventory and simply hasn’t been processed. Stopping these letters — which could  have  otherwise  been  sent  to  thousands  of  taxpayers  —  will  help  avoid  confusion.

It is important to appreciate that many IRS notices are statutorily required to be issued within a certain timeframe to be legally valid. This means they must be sent, absent congressional action. We will continue to explore areas where the IRS can make changes and are in the process of reviewing the full set of notices that we send to determine where we can make adjustments while we continue to work through unprocessed returns and taxpayer correspondence.

Making significant operational changes to our systems, including stopping certain notices from being printed and mailed, may require programming and other  operational  changes.  With  an  outdated  technological  ecosystem,  these  are  changes that cannot be made as efficiently as they should be — and that is part of the reason why investing in IRS IT modernization is so important. While we will make every effort to find improvements to help taxpayers, we will have to do so in the constraints of an outdated system, where a seemingly simple modification could run the risk of jeopardizing the overall operating system critical to the current tax season — and the more than 160 million returns we anticipate receiving.

“Since  last  year,  we  have  been  focused  on  numerous  taxpayer-related  issues  and have pursued innovative ideas and processes not previously deployed by the IRS in an effort to get healthy and provide meaningful taxpayer services,” IRS Commissioner Chuck Rettig said. “Our employees have worked hard, long hours during the pandemic to assist taxpayers and successfully modify our systems, despite lacking the funding that we need to adequately serve the American people. We appreciate the patience and understanding of everyone and the many  expressions  of  appreciation  for  the  efforts  of  our  employees,  who  have  continued to step forward while sharing the same health and safety concerns of others. We are continuing to balance multiple unprecedented demands, including  starting  the  filing  season  as  well  as  continuing  to  work  on  important  new  tax provisions. The IRS has been operating in an ‘all hands on deck’ approach, leaving  nothing  off  the  table  for  consideration  to  improve  overall  service.  We  will rapidly adapt to changing circumstances, when appropriate to do so.

”The IRS is continuing to assess other changes and system modifications it may be able to implement to assist taxpayers on an array of issues. We will continue to make information available to taxpayers throughout the filing season.