The Internal Revenue Service (IRS) has faced funding cuts that have led to a decrease in staff. This, paired with the impact of the pandemic, has created an environment that, as noted in a recent piece in ProPublica, “is failing our taxpayers.”
The agency is late in sending out notices, so taxpayers receive a notice without enough time to respond. The agency has also sent out notices before it even finishes processing mail already at its office. This can lead to a notice for a tax debt the taxpayer has already addressed and is in the agency’s office, but the agency has yet to process the payment.
Needless to say, taxpayers are facing frustration and serious headaches as they try to navigate these issues.
How bad is it?
Recent data from the IRS shows that the agency still has to process over 6 million individual tax returns from the 2019 tax year. This can lead to two issues for taxpayers:
- IRS cashes the taxpayer’s payment but fails to apply it to the taxpayer’s account.
- IRS processes the return but has yet to process the payment.
Either situation can result in a past-due letter — in some cases, threatening serious action if the taxpayer fails to respond.
What options are available for taxpayers in this situation?
Those who receive a notice and believe they have already addressed the issue could choose to wait and see if the matter sorts itself out in time. However, if the notice involves a significant sum, it may be wise to act to address the problem. A failure to do so could result in a levy or seizure of property to settle the disputed tax debt. The attorneys at Goldburd McCone are familiar with these matters and can review your situation. After a review, they can provide counsel on the various options available to help better ensure a resolution that works for your specific situation.