When It Takes the IRS 5+ Months to Process an Amended Return…

Back in May, clients of mine discovered they left something out of their 2018 tax return. We prepared an amended return, the clients included a check for the additional tax, and it was mailed off to Kansas City. The check was cashed in July, so the amended return was received.

Fast forward to today. The amended return still has not been processed (and no one knows when it will be; it’s almost certainly sitting in a bin with thousands of other amended returns), but the IRS Automated Underreporting Unit discovered the error and sent the clients a notice. They found the same error. So now my clients have to respond to this notice, telling the IRS there’s an amended return somewhere in Kansas City.

Normally, when a taxpayer submits an amended return for a year the IRS computer system notes the return exists so that no AUR notices are sent until the IRS processes the return. Because of Covid the IRS is behind. Way, way behind. At last report the IRS still has 8+ million pieces of mail to go through. So what my clients are going through is going to be repeated by many others, just adding to the IRS’s backlog.

Unfortunately, I don’t see a solution to these issues. Covid isn’t going away until likely next summer (based on the vaccine news, I expect most Americans to be vaccinated by then), meaning the IRS issues we face today will continue for months. (Even when the IRS fully reopens we’re looking at months to clear the backlog.) And it’s not just amended returns. I have a payment issue for a client (the IRS misapplied a payment) where I sent a response in September 2019; that response has still not been assigned to anyone. An Appeals request sent in February has just been assigned to somebody, but the helpful staff at the Practitioner Priority Service (and they did help me this morning) have no idea when the case will actually be worked. We all do need to be patient, but many taxpayers aren’t which is adding to the issues.

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