Written by: Theodore M. David, Chair, Tax Law Committee
Current Items:
1) Here Come the Love Letters
2) Happy Filing Season
3) IRS Report Card
1). Pat Boone did “Love Letters in the Sand.” A sweet reflection on the very essence of the Love Thrill. Now, I’ve seen grown men weep with a love letter from the IRS. What do they want? “ I’m from the IRS and I am here to help you??? A friend of mine, out of nowhere, got a letter with an enclosed check with no explanation at all. He loved it. But most don’t provide a free dinner and there is no BOGO. So, what do you do when a pandemic hits and tons of taxes are due? Perhaps stop the letters for a while. But wait, this just recently from the IRS: Due to the unprecedented effects of the COVID-19 pandemic, the IRS temporarily suspended the mailing of automated reminders to pay overdue tax bills starting in February 2022. These reminders would have normally been issued as a follow-up after the initial notice. Although these reminder notices were suspended, the failure-to-pay penalty continues to accrue for taxpayers who did not fully pay their bills in response to the initial balance-due notice.
Given this unusual situation, the IRS is taking several steps in advance of resuming normal collection notices for tax years 2020 and 2021 to help taxpayers with unpaid tax bills, including some people who have not received a notice from the IRS in more than a year.
To help taxpayers as the normal processes resume, the IRS will be issuing a special reminder letter starting next month. The letter will alert the taxpayer of their liability, easy ways to pay and the amount of penalty relief, if applied. The IRS urges taxpayers who are unable to pay their full balance-due to visit IRS.gov/payments to make arrangements to resolve their bill.
2). So when can you file and get the 2023 tax refund you so justly deserve? The Internal Revenue Service today announced Monday, Jan. 29, 2024, as the official start date of the nation’s 2024 tax season when the agency will begin accepting and processing 2023 tax returns.
The IRS expects more than 128.7 million individual tax returns to be filed by the April 15, 2024, tax deadline.
Although the IRS will not officially begin accepting and processing tax returns until Jan. 29, people do not need to wait until then to work on their taxes if they’re using software companies or tax professionals. For example, most software companies accept electronic submissions and then hold them until the IRS is ready to begin processing later this month. IRS Free File will also be available on IRS.gov starting Jan. 12 in advance of the filing season opening. The IRS Direct File pilot will be rolled out in phases as final testing is completed and is expected to be widely available in mid-March to eligible taxpayers in the participating states.
Taxpayers will continue to see helpful changes at the IRS following ongoing transformation work. Building off the success of the 2023 tax season, which saw significant improvements following the passage of the Inflation Reduction Act, the 2024 filing season will continue reflecting the focus on improving services to taxpayers.
“As our transformation efforts take hold, taxpayers will continue to see a marked improvement in IRS operations in the upcoming filing season,” said IRS Commissioner Danny Werfel. “IRS employees are working hard to make sure that new funding is used to help taxpayers by making the process of preparing and filing taxes easier.”
3). Every year IRS gets a report card showing how it is doing. Ed Koch started it all when he was Mayor of NYC. He’d asked, “So, how am I doing?” IRS latched on to the idea. National Taxpayer Advocate Erin M. Collins today released her 2023 Annual Report to Congress, describing 2023 as a year of “extraordinary transition for the IRS and therefore for taxpayers.”
The report credits the Internal Revenue Service with substantially improving taxpayer services and developing plans to transform the taxpayer experience in the coming years, but it identifies paper processing as an area of continuing weakness.
By law, the Advocate’s report is required to identify the 10 most serious problems taxpayers are experiencing in their dealings with the IRS and to make administrative and legislative recommendations to address those problems. Before cataloging taxpayer challenges, however, Collins praised the IRS for taking notable strides forward.
“Overall, the magnitude of successes exceeded the areas of weakness in 2023, and most metrics showed significant improvement from the depths of the [COVID-19] pandemic,” Collins wrote in the report’s preface. The report says the IRS virtually eliminated its backlog of unprocessed original individual income tax returns (Forms 1040) and substantially improved telephone service.
Many thanks to IRS for providing the stuff for this Bull this month, while I sit under a palm tree.