Hug Your Tax Professional: The IRS Is At It Again

I was hoping that the 2022 Tax Season (which begins for individuals on Monday) would be more pleasant than the last two.  Yes, the IRS didn’t cause Covid; however, as the National Taxpayer Advocate noted in her recent report the IRS’s response has been (to put it charitably) ‘lacking.’  It doesn’t look like things are improving based on three items in the mail.

The first is the most serious.  The IRS is sending out letters (Letter 6419) noting how much taxpayers received in the Advance Child Tax Credit (ACTC).  Yesterday, a client received hers.  The letter noted that she had received $1,000.  She went through her records and found that was wrong (she received a little over $800).  The letter gives a phone number to call if there’s a discrepancy–which she did.  The helpful IRS agent told her that the letter is wrong, and that the information my client had (which she got from her bank records) was accurate.  “The IRS is aware of the issue.”

Are corrected letters going to be sent?  Is this a widespread issue or is it just (say) less than 1% of all letters?  What will happen when I file the client’s return noting the correct amount of ACTC?  Will the IRS use the letter’s $1,000 or the correct amount in verifying the return?  Will a whole bunch of returns have very slow processing because of this?  (Undoubtedly, yes.)

I just saw on Twitter other tax professionals seeing the same issue, so it’s clear there’s a problem.  Hopefully, it’s just a few individuals…but I have my doubts.

The second issue relates to an IRS notice that come on Tuesday, January 18th.  The notice is dated December 6, 2021 and asks for payment by December 27, 2021.  Given how bad the mail has been it’s possible this is a Post Office issue rather than IRS, but I strongly suspect the IRS is again sending out notices well after their dates.  There was no insert telling me that the client has longer to pay.  Again, is this a one-off or the start of a trend?

The third issue involves a correspondence examination.  A client was selected for a correspondence exam.  We needed additional time to get the paperwork together; the IRS gave us an additional month (to January 5th).  We sent our response to the IRS on January 3rd.  In yesterday’s mail, the IRS has now assessed the tax with an audit report dated December 27, 2021.  Yes, the IRS ignored the extension it gave.  Yes, I will have to call the IRS to see what’s going on and why the IRS’s left and right hands have no idea what they’re doing.  Yes, this adds to the call volume at the IRS–and it shouldn’t have happened.

This is not a good start to the 2022 Tax Season.


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