IRS OPERATIONS UPDATE

The IRS recently issued various notices updating the status of certain IRS functions, many of which have been "paused" or slowed down due to COVID or other factors. Some of the more interesting ones are:

FILED TAX RETURNS [UPDATED JULY 29, 2022]
The IRS is opening mail within normal timeframes and all paper and electronic individual returns received prior to January 2022 have been processed if the return had no errors or did not require further review.
As of July 22, 2022, we had 10.5 million unprocessed individual tax year 2021 returns. Of these, 1.7 million returns require error correction or other special handling, and 8.8 million are paper returns waiting to be reviewed and processed. This work does not typically require us to correspond with taxpayers but does require special handling by an IRS employee so, in these instances, it is taking the IRS more than 21 days to issue any related refund and in some cases this work could take 90 to 120 days. If a correction is made to any Recovery Rebate Credit, Child Tax Credit, Earned Income Tax Credit or Additional Child Tax Credit claimed on the return, the IRS will send taxpayers an explanation. 


How long you may have to wait: The IRS understands the importance of timely processing of tax returns and refund issuance. We have processed all error free returns received prior to January 2022 and continue to work the returns that need to be manually reviewed due to errors. We are continuing to reroute tax returns and taxpayer correspondence from locations that are behind to locations where more staff is available, and we are taking other actions to minimize any delays. Tax returns are opened and processed in the order received. As the return is processed, whether it was filed electronically or on paper, it may be delayed because it has a mistake including errors concerning the Recovery Rebate Credit and the Child Tax Credit, is missing information, or there is suspected identity theft or fraud. If we can fix it without contacting you, we will. If we need more information or need you to verify that it was you who sent the tax return, we will write you a letter. The resolution of these issues could take 90 to 120 days depending on how quickly and accurately you respond, and the ability of IRS staff trained and working under social distancing requirements to complete the processing of your return.


What you should do: In most instances, no further action is needed but you may check Where’s My Refund? or you can view your account. If you filed electronically and received an acknowledgement, you do not need to take any further action other than promptly responding to any requests for information. If you filed on paper, check Where’s My Refund? If it tells you we have received your return or are processing or reviewing it, we are processing your return, but it may be under review. If you filed before January 2022 and Where’s My Refund? does not have any information, your return has been opened but work on it has not begun. We’re working hard to get through the carryover inventory. Please don’t file a second tax return or contact the IRS about the status of your return.

NOTICE OF FEDERAL TAX LIEN ISSUES [UPDATED JUNE 15, 2022]
Lien releases, certificates of discharge and other lien issues are being processed as normal.
How long you may have to wait: We’re assigning them within 10 days. You should receive a response within 30 days.
What you should do: Use the E-Fax line for our Advisory Consolidated Receipts (ACR) site (844-201-8382) for requests such as:
•    Discharge of property from the federal tax lien
•    Withdrawal of the notice of the federal tax lien
•    Subordination of the federal tax lien
See Publication 4235, Collection Advisory Group Numbers and Addresses for more information on the process for submitting applications for lien certificates, and related topics.

IRS COLLECTION PROGRAMS [UPDATED JUNE 15, 2022]
Most Collection enforcement programs (including the systemic and automated lien and levy programs, and automated levy programs such as the Federal Payment Levy Program and the State Income Tax Levy Program) are currently paused. Field Collection revenue officers are assigned specific taxpayer cases and are operating with their normal authorities. Field and face-to-face contacts were restricted during the pandemic but we expect normal field activities to resume in the summer of 2022.

IRS COLLECTION NOTICES [UPDATED JULY 27, 2022]
The IRS is aware that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount. These are the first notices issued after a tax return is processed.
No immediate action or phone call needed: Taxpayers who receive a notice but paid the tax they owed in full and on time, electronically or by check, should not respond to the notice at this time. The IRS is researching the matter and will provide an update as soon as possible. Aside from the first billing notice after a tax return is processed, we have paused the issuance of most balance due notices. Note however that revenue officers are operating with their normal authorities and may issue notices on the cases they are working.  


 

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About the Authors

John Cocklereece headshot

John A. Cocklereece, Jr.

John Cocklereece concentrates his practice on property tax appeals, business law, tax controversies, and estate planning and administration.
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Attorney Travis Woolen

Travis Woolen

Travis joined Bell, Davis & Pitt shortly after graduating from law school. Focusing his practice on trusts and estates, he regularly advises clients regarding the preparation of simple Wills, Revocable Trusts, and Powers of Attorney, as well as more complex tax planning trusts and other documents to carry out his clients’ desires in a tax-efficient manner. Travis also regularly helps implement estate plans by representing fiduciaries in the administration of trusts and estates.
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