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IMRS Report August 7, 2020
Contact Don at dbarg@barg-henson.com
Please visit this Page for updates:
IRS Operations During COVID-19: Mission-critical functions continue
Pending Check Payments and Payment Notices: If a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog of mail the IRS is processing due to COVID-19. Any payments will be posted as the date we received them rather than the date the agency processed them. To avoid penalties and interest, taxpayers should not cancel their checks and should ensure funds continue to be available so the IRS can process them.
To provide fair and equitable treatment, the IRS is providing relief from bad check penalties for dishonored checks the agency received between March 1 and July 15 due to delays in this IRS processing. However, interest and penalties may still apply.
Due to high call volumes, the IRS suggests waiting to contact the agency about any unprocessed paper payments still pending.
Processing Delays for Paper Tax Returns: We’re experiencing delays in processing paper tax returns due to limited staffing. If you already filed a paper return, we will process it in the order we received it. Do not file a second tax return or contact the IRS about the status of your return.
Telephone Options: Automated phone lines & All IRS toll-free phone lines are available. However, callers should continue to expect long waits due to limited staffing.
IRS Tax Forms: The IRS’s National Distribution Center has reopened as of July 13, 2020 with reduced staffing. All previously submitted forms/publications requests are being processed as quickly as possible and as products become available. Please do not submit duplicate requests as this may cause further delays.
IRS Working to Reduce CAF Backlog: We are working hard to reduce the backlog of third-party authorizations. However, due to site closures relating to COVID-19 concerns, we currently are exceeding our five-business day target for approval. Our current time frame for authorization approval is approximately 15 business days. We request you do not submit duplicate authorizations as duplicate filings will only cause further delays. We expect to have full staffing in place soon and reduce the wait time.
Future Digital Improvements
Also, The IRS is working on a solution to provide for the acceptance of Forms 8821 and 2848 with electronic signature images by early 2021.
Economic Impact Payment – Homeless, Underserved, Unbanked and Underbanked.
Help us spread the word: Americans who don’t earn enough to have a tax filing requirement should sign up online with #IRS for an Economic Impact Payment by Oct 15.
TAS Can Assist with Correcting EIP Amounts for Limited Groups of Taxpayers. TAS will now accept cases for taxpayers whose EIP issues fall within one of the categories described and otherwise meet TAS criteria beginning August 10, 2020.
Webinars for Tax Practitioners
Understanding the e-Services Transcript Delivery System - August 13, 2020. Even though this date has passed, you can still register and view this webinar, although no CE is available. No CE will be issued.
Understanding Third Party Authorizations - Power of Attorney Form 2848 - August 27, 2020
Practitioners Want You to Know:
Written Cybersecurity plan needed for PTIN renewal
Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal, now requires tax return preparers to check a box that states, As a paid tax return preparer, I am aware of my legal obligation to have a data security plan and to provide data and system security protections for all taxpayer information. Check the box to confirm you are aware of this responsibility. See line 11, Data Security Responsibilities.
Previous Issues:
CAF Unit duplications
Issue: Practitioners state that when POAs don’t show on the system, compliance employees or phone assistors take a copy and fax them to the CAF units. Doesn’t this account for duplications as well. How is this handled?
Response: Due to recent closures, employees answering calls will have some temporary exceptions to current IRM procedures. As of Monday July 20, 2020, when accepting a faxed authorization, if it is determined that the POA/TIA was previously submitted, but not on file, assistors will ask the date of Form 2848 or Form 8821 was submitted. Based on caller response: the form will be treated as classified waste or sent to the CAF unit for processing.
Status: Closed
New Issues:
Letter 9325 even though return e-filed
Issue: Two taxpayers have received letters from the Service stating they have no record of receiving a tax return for the given year on the letter. However, these requested filings are for returns that were e-filed and receipted by the 9325. Numerous CPAs around the country reported the same experience. https://www.irs.gov/pub/irs-pdf/f9325.pdf
Response: We are unable to follow-up on this issue until additional information is provided.
Status: Closed
Issue: Taxpayers are frustrated with the toll-free line 1-800-829-1040. They report receiving the message “due to high volume, your questions can not be answered at this time” and it automatically hang up the call.
Response: All IRS toll-free phone lines supported by customer service representatives for both taxpayers and tax professionals are available. However, callers should continue to expect long waits due to limited staffing. IRS.gov remains the best source for questions about tax law, checks on refund status, tax payments and Economic Impact Payments. Numerous online options for tax help can save time and effort.
Status: Closed
Payment not recognized
Issue: It is being reported that returns were filed, and payments made, but notices are being received requesting payment of due amounts.
Response: If a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog of mail the IRS is processing due to COVID-19. Any payments will be posted as the date we received them rather than the date the agency processed them. To avoid penalties and interest, taxpayers should not cancel their checks and should ensure funds continue to be available so the IRS can process them.
To provide fair and equitable treatment, the IRS is providing relief from bad check penalties for dishonored checks the agency received between March 1 and July 15 due to delays in this IRS processing. However, interest and penalties may still apply.
Due to high call volumes, the IRS suggests waiting to contact the agency about any unprocessed paper payments still pending.
Status: Closed
Is purported IRS letter legitimate?
Issue: Practitioner wants to know if a certain letter received from IRS is legitimate.
Response: Search on IRS.gov to view the letter or contact your local Stakeholder Liaison for assistance. https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter
Status: Closed
Penalty removal
Issue: If a practitioner missed the July 15th deadline for filing return or extension or payment, due to staff or practitioner having COVID 19 related illness, will they get a reprieve from penalties?
Response: IRS Reasonable Cause is based on all the facts and circumstances in your situation. We will consider any reason which establishes that you used all ordinary business care and prudence to meet your Federal tax obligations but were nevertheless unable to do so. https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-reasonable-cause
Status: Closed
Rise in Fraudulent activity
Issue: Tax Professional is seeing a lot of money laundering and fraud activity from a few new clients.
Response: Visit https://www.irs.gov/individuals/how-do-you-report-suspected-tax-fraud-activity to report suspected fraudulent activity.
Status: Closed
Has Exam changed their contact procedure?
Issue: Practitioner reported that their client received a phone call telling him that he has been selected for audit. No correspondence had been received.
Response: For new examinations a letter will be issued for initial contact. However, in some cases where a short statute may be present, a soft contact by phone may take place. For full details on the resumption of compliance activities please visit the IRS Mission Critical functions webpage to view guidance memos issued by various IRS business divisions. https://www.irs.gov/pub/irs-utl/sbse_compliance_priorities_post_people_first_initiative.pdf
Status: Closed