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Tax Professionals Urge Action from IRS on Challenges in Upcoming Tax Filing Season

For more than 18 months, the AICPA has strongly advocated for penalty relief for taxpayers and recommended actions to address IRS service issues fueled by the coronavirus pandemic.

Jan. 14, 2022

Form 1040 2021

A diverse group of stakeholders from the tax practitioner community, including those representing various taxpayer communities, small businesses, and low-income Americans, have joined together to form a coalition urging the Internal Revenue Service (IRS) to take action to meaningfully reduce unnecessary burdens for taxpayers and practitioners during this upcoming tax filing season.

The American Institute of CPAs (AICPA), has joined this coalition, which includes Latino Tax Pro, National Association of Black Accountants, Inc. (NABA), National Association of Enrolled Agents (NAEA), National Association of Tax Professionals (NATP), National Conference of CPA Practitioners (NCCPAP), National Society of Accountants (NSA), National Society of Black Certified Public Accountants, Inc. (NSBCPA), National Society of Tax Professionals (NSTP), Padgett Business Services and Prosperity Now. In a letter, the coalition is urging the IRS to take action, writing, “It is time to take steps to ameliorate the situation. Implementing reasonable penalty relief measures, that the IRS can offer immediately, are necessary to help not only taxpayers and tax professionals but also the IRS during these challenging times.”

On a recent call with reporters, officials from the Department of the Treasury acknowledged that they are anticipating continued challenges as we enter a third tax filing season under a global pandemic but offered no solutions to mitigate impending service issues.

In the 2021 National Taxpayer Advocate Annual Report to Congress, National Taxpayer Advocate, Erin Collins, highlights the most serious problems encountered by taxpayers. Among them, processing and refund delays; telephone and in-person services; and IRS collection procedures. “There is no way to sugarcoat the year 2021 in tax administration: From the perspective of tens of millions of taxpayers, tax administration did not work for them,” says the report.

For more than 18 months, the AICPA has strongly advocated for penalty relief for taxpayers and recommended actions to address IRS service issues fueled by the coronavirus pandemic. Those recommendations are:

  1. Discontinue automated compliance actions until the IRS is prepared to devote the necessary resources for a timely resolution – similar recommendation also included in the 2021 National Taxpayer Advocate report
  2. Align requests for account holds with the time it takes the IRS to process any penalty abatement requests – similar recommendation also included in the 2021 National Taxpayer Advocate report
  3. Offer a reasonable cause penalty waiver, similar to the procedures of first time abate administrative waiver
  4. Provide taxpayers with targeted relief from the underpayment and the late payment penalty for the 2020 and 2021 tax year

The coalition has also requested a meeting be scheduled with IRS officials to discuss their concerns and recommendations and directly address any questions.