AICPA joins coalition seeking relief from IRS service challenges

As part of a diverse coalition of organizations representing tax professionals and other stakeholders — and in light of the continuing COVID-19 pandemic — the AICPA on Friday called on the IRS and the Treasury to implement taxpayer relief from penalties and certain other compliance measures.

The AICPA was among the parties signing a letter to IRS Commissioner Charles Rettig and Lily Batchelder, Assistant Secretary for Tax Policy at the Treasury, which was copied to members of the Senate Finance Committee and Ways and means of the House.

Although the pandemic has created unforeseen and protracted problems for the IRS, taxpayers and tax practitioners, the IRS has not taken reasonable steps to reduce the charges which appear likely to continue into the upcoming tax season. tax returns, the letter says.

Given the IRS’ historically large backlog of unprocessed returns and correspondence and its inability to answer more than a tiny fraction of the phone calls it receives, the Service has been unable in many cases to Respond to taxpayer requests to resolve even simple issues. Taxpayers and their representatives are often unable to communicate with the IRS, even to limit enforcement actions taken in error, the letter states.

Therefore, the letter recommended that the IRS:

  • Cease all automated compliance action until the Service can devote the necessary resources to properly and timely resolve an issue. National Taxpayer Advocate Erin M. Collins made a similar point Wednesday in her Annual Report to Congress, listing as No. 1 of the 10 most serious problems taxpayers face, excessive delays in processing and refunds hurting taxpayers.
  • Align account hold requests with the time it takes for the IRS to process any request for penalty reduction.
  • Provide a reasonable cause penalty waiver, similar to the procedures for a first abatement administrative waiver (FTA), without affecting the taxpayer’s eligibility for the FTA in future tax years.
  • Provide taxpayers with targeted relief from both underpayment of the estimated tax penalty and late payment penalty for the 2020 and 2021 tax years.

The four points were also conveyed earlier this week in a statement by Barry Melancon, CPA, CGMA, President and CEO of the AICPA, and have been repeatedly emphasized by the AICPA over the past year. and a half. In accordance with these recommendations and Collins’ assessment in his Annual Report, tax experts said that unless there are relief measures and stronger administrative capacity for the IRS, they fear the upcoming tax season will compound the challenges of the past two years.

Other signatories to the letter are Latino Tax Pro, National Association of Black Accountants, National Association of Enrolled Agents, National Association of Tax Professionals, National Conference of CPA Practitioners, National Society of Accountants, National Society of Black Certified Public Accountants, the National Society of Tax Professionals, Padgett Business Services and Prosperity Now.

— To comment on this article or suggest an idea for another article, contact Paul Bonner at [email protected].

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