IRS Delays

[Nashville]

What to do when your own preparation of taxes becomes questionable because of IRS delays? Let's face it, we are in an unprecedent era of IRS delays and non-responsiveness that we've never had to deal with before.

JudyRocks claims to be in a position of having to file a return by October, not knowing how to report because IRS has taken too long to process 2010 amendment. I myself have had 2-3 taxpayers who cannot go forward because of IRS either delaying or being non-responsive to issues.

The old methods of dealing with this are out-of-touch with the current IRS quagmire. Calling the IRS doesn't work which, after hours on hold, you either get a hang-up or talk with someone who can only tell you "I don't have any further information so we must still be working on it." Calling the taxpayer advocate doesn't work either because they are even more backlogged than the IRS for the same reason.

There are many reasons given. One is that Congress became infuriated with IRS behavior and cut their staff to make their lives miserable. It is clear that Congress cut their staff but I have to think that even Congress would not be stupid enough to cut their own revenue. Another theory is that in the last three years, IRS is having to deal suddenly with 1 million cases of identity theft every year. One usual excuse given by the IRS is the loss of less than two weeks work during the 2013 sequester (which amounted to two weeks paid leave for their employees).

The slow ooze of determinations from the audit division has not resulted in a slowdown of efforts from the Collection Division. The Collection Division will not take responsibility or take action to prompt the audit division. In some cases, audit division queries and amended returns have resulted in refunds for the taxpayer but the Collection Division continues to collect taxes on prior issues.

After reading the above laments, does anyone have an effective strategy for getting resolutions from the IRS?

[Burke]

Just got a letter today about a 2013 return requesting the same info they asked for a year ago about a missing Sche D. We filed an amended return with the Sche D in November 2014, and sent a check for addl tax which they cashed 11/14/14. Sent the current letter to an incorrect address to boot (transposed the house number which has never been on any documents submitted, not even their first letter.) I am just shaking my head......

[Nashville]

Is there a plan?

Burke, this is exactly the type of thing going on everywhere, except my situations are much longer in duration. Even though your client has paid the proposed shortage, the IRS is telling you he still owes it. This means his refund for 2015 could be shortchanged by the disputed amount. Even payment of the proposed shortage may not set the record straight.

What do you plan to do about it? Do you have a course of action you can share with us?

[DaveO]

As far as the identity theft issue that could be largely fixed with two simple changes.
1. No more direct deposits or refunds on debit cards.
2. No efile except through an ERO.

[TAXNJ]

Dc & known

This subject is well known and discussed on prior posts. Still frustrating and growing.

Most of the areas of complaints and frustrations posted on TTB web-site concerning the IRS are similar those in the report.

Interesting report.
Reference:
Issue Number: IR-2015-97

National Taxpayer Advocate Reviews Filing Season and Identifies Priority Areas and Challenges in Mid Year Report to Congress

This is not a critical but maybe you and some of your friends on the Forum can ask your congress rep if you can go before a Congressional Committee to present what is happening. Congress needs to hear from the people in the field experiencing the growing frustration and problems. Think actions that need to be taken to improve/correct the issues are beyond the scope of this Forum unless you have another answer.

[Nashville]

Yes, Well-known problem

This subject is well known and discussed on prior posts. Still frustrating and growing. Most of the areas of complaints and frustrations posted on TTB web-site concerning the IRS are similar those in the report.
National Taxpayer Advocate Reviews Filing Season and Identifies Priority Areas and Challenges in Mid Year Report to Congress

Thanks for your post, TAXNJ, and you are quite correct.

Yes, there has been considerable discussion on this forum, as well as the annual Taxpayer Advocate review. However, since the last time the discussion occurred there have been several more incidents posted where the IRS is holding up ongoing tax preparation due to their lethargic lack of processing. I think the problem has been identified not only by the Taxpayer Advocate but by several other knowledgeable parties, not the least of which are our own forum members.

Once any problem has been identified the next question always becomes "What do we do about it?" and that is where we are at this point. Previous discussions have yielded some measures such as the local IRS liason, and contacting your congressman. I wouldn't discount any possible solution, and the liason is very keenly aware of what's going on, but will not get involved in any specific cases. Any situation can be sent to our congressmen, and you will get a nice letter, but nothing will happen unless you are one of those $5,000-a-plate attendees.

We can always make suggestions that don't have a prayer, like getting Congress to pass legislation that any delinquent tax issue becomes de facto in favor of the taxpayer, but as you can imagine that is so far out we shouldn't waste time talking about it. I am seeking solutions beyond identification.

[Nashville]

Yes, Simple but effective idea

Some states that were so enamoured by the debit card (and their powerful banking lobbies) have since discontinued use of debit card refunds. Both of your suggestions would absolutely work to reduce identity theft - probably by 99%. Is the problem so bad that the IRS will go back to printing checks, or processing by hand those returns for millions of people who do their own return? I don't think so, but your plan would definitely stop it.

[Burke]

Burke, this is exactly the type of thing going on everywhere, except my situations are much longer in duration. Even though your client has paid the proposed shortage, the IRS is telling you he still owes it. This means his refund for 2015 could be shortchanged by the disputed amount. Even payment of the proposed shortage may not set the record straight.

What do you plan to do about it? Do you have a course of action you can share with us?

I am going to return their recent letter with a copy of the 1040X, and copy of the check which they cashed. And see what happens. The first letter simply said the Schedule D was missing. (It was a self-prepared return and had a ton of errors.) They mis-figured the capital gain on the sale of rental property, did not complete 4797, had errors on the Sche E, had errors on the Sche A.) Which is why I did a 1040X with all the appropriate corrected schedules. A copy of their original letter was also included with the 1040X. I assume the $140 is appended somewhere and not matched with the original request.

[rkhan71]

My Take...

I have commented before recently on the activities and behavior of the IRS as of late. But I am putting my 2 cents in again because things to me are getting worse. I had said before that am trying to stop working with the IRS until their situation gets fixed. When working with the IRS, it costs extra time and pain trying to resolve issues for clients. I end up getting egg on my face because of the inefficient nature of what is going on with the IRS presently.

I have had settled IA's and then a letter a week letter from another campus stating a levy if the client does not pay one of the years. A year that has already been resolved and is in installment situation. What is that all about?! I have had clients who are slow to act, and the IRS compounds it with their bad circumstance making me, again, look bad. I have all but given up thus far. I do not know if charging extra money for services would really help. It is just an all around problem once you start to work a case. It makes me nervous, and the time spent on a particular case is overwhelming too with any "calls" made. I would rather correspond by mail for all the issues. Hate waiting on hold forever, just to be told call later or some stupid thing.

RFK

[Nashville]

Advertisers for this

In spite of the shutdown of unscrupulous national-advertised "tax relief" companies like Roni Deutsch and J K Harris, we still see firms advertising that certain firms can "settle all your tax problems" and get "levies cancelled instantly".

As anyone knows, one should be wary of such claims, but I do believe the big rip-off companies are out of the picture for the most part. If the current round of advertisers are more scrupulous than the aforementioned, how can they get the IRS (and their collection division) to respond instantly? If taxpayers, tax preparers, and the taxpayer advocate can't get things settled, how to these firms do it??

Do they know someone on the inside? Are they using methods we are not aware of? Will the IRS respond more quickly to tax lawyers than to the rest of us? Or are they advertising falsely?

[JohnH]

It probably boils down to one's definition of "instantly". Since most people consulting these firms can't afford to pay their taxes, they aren't likely to be able to hire a lawyer to sue another lawyer over false advertising claims. Most of the time that's going to require a big up front retainer since that type of case isn't likely to be taken on contingency.