A coalition of organizations that represent tax professionals, among others, understands all too well the enormous impact the COVID-19 pandemic has made on professionals across all industries and professions. In response, the coalition called on the IRS and Treasury to implement taxpayer relief from penalties and certain other compliance actions.
According to a letter sent to IRS Commissioner Charles Rettig, Assistant Secretary for Tax Policy at Treasury Lily Batchelder, and members of the Senate Finance Committee and House Ways and Means Committee, the coalition is concerned that the IRS has not done enough to remedy the challenges facing taxpayers and professionals that stem from the pandemic. The letter asked to discontinue any automated compliance action until the IRS can devote necessary resources to properly and timely resolve a matter, align requests for account holds with the time it takes the IRS to process any penalty abatement requests, and offer a reasonable cause penalty waiver without affecting the taxpayer’s eligibility for FTA in future tax years.
Parties that signed the letter included Latino Tax Pro, American Institute of CPAs (AICPA), the 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, National Society of Tax Professionals, Padgett Business Services, and Prosperity Now.
AICPA President and CEO, Barry Melancon, released a statement on the matter. Part of the statement read, “Today, Treasury officials acknowledged that the upcoming 2021 tax filing season will be ‘frustrating’ for Americans but stopped short of providing any measures they intend to implement to mitigate the expected challenges.” Melancon proposed immediate actions the IRS can take to ease the taxpayer and professional’s burden. These actions include halting compliance actions until the IRS can devote the necessary resources for timely resolution of issues, providing taxpayers with a simplified abatement process and providing taxpayers with targeted relief from underpayment and late payment tax penalties for the 2020 and 2021 tax years. As the public makes its way through the tax filing season, the efforts of the coalition are more important than ever.
This month, the IRS issued a statement about the notices and letters it would not send to taxpayers. They include notices of unfiled returns and unpaid balances generally, including a final notice of an outstanding balance and intent to levy. “Taxpayers, practitioners, and IRS will benefit from reducing unnecessary contact, such as erroneous notices or warnings of levy, and provide much-needed relief during an already stressful and overwhelming tax season,” said the AICPA.
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