Proposed Changes at the IRS

by Mike Nelson

The letter includes an ask for Congress to direct the Department of the Treasury and the IRS to make four changes:

1.)  Discontinue automated compliance actions until the IRS can devote the resources to resolve the compliance issue.

2.)  Align requests for account holds with the timeline for penalty abatement requests.

3.)  Offer a reasonable cause penalty waiver without affecting eligibility for first time abate (FTA) in the future.

4.)  Provide targeted taxpayer relief for the underpayment of estimated tax penalty and late payment penalty for the 2020 and 2021 tax year.

These changes would reduce the need for CPAs, tax professionals, and taxpayers to contact the IRS, which would allow them to work on the backlog of requests they currently have and be able to respond to incoming requests.

In the Fall of 2021, the WSCPA Advocacy team met with most of our State’s congressional delegation including all members that serve on the respective fiscal committees. At these meetings we discussed, among other things, HR 5155 which is federal legislation that would implement several of these points.

We are continuing to monitor the ongoing issues at the IRS and will continue to advocate for changes that will allow them to improve customer service response times and work through the backlog that they have.