ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – THE IRS IS IN ONE HELL OF A MESS! – PART 3
By Robert S. Schriebman
The sad saga of the IRS continues. In Parts 1 and 2, I discussed the mountain of unopen correspondence sitting in countless 18-wheelers waiting to be opened. There are literally millions of unopened correspondences including payroll tax returns, income tax returns, refund claims, and responses to out-of-control automated enforce collection. It has gotten to the point where Congress has demanded action.
The Specific demands of Congress are the following:
- Halt automated collections from now until at least 90 days after April 18, 2022;
- Delay the collection process for filers until any active and pending penalty abatement requests have been processed;
- Streamline the reasonable cause penalty abatement process for taxpayers impacted by the Covid-19 pandemic without the need for written correspondence;
- Provide targeted tax penalty relief for taxpayers who paid at least 70 percent of the tax due for 2020 and 2021 tax years; and
- Expedite processing of amended returns and provide TAX and congressional caseworkers with timely responses.
The IRS Finally Takes the First Steps
In a recent American Bar Association Mid-Year Tax Meeting a high-level IRS lawyer announced that soon the IRS will be suspending certain automated notices especially in situations where no tax return has been filed but payments have been made such as quarterly estimated taxes and quarterly payroll tax withholdings. However, nothing was said about suspending notices having to do with automated enforced collection, such as continuous levies. This is a very serious topic and I can speak with frustrated knowledge as I have a client suffering from almost daily automated levies to the point where the IRS has collected 2-3 times more than the taxpayer owes and there is no stopping the computer! The collection notices provide an 800 number to call for relief, but when you call the number, you receive a recorded message saying that there was no one there to take your call. My poor client has no alternative but to file continuing claims for refund. These claims too are most likely sitting somewhere in an 18-wheeler.
The situation has gotten so overwhelming that the IRS has no clear-cut solution. The high-ranking IRS lawyer who announced an end to certain collection notices, at the same time, announced that the IRS has a chronic manpower shortage because they cannot compete with compensation offered in the private sector.
While the IRS is trying dig out of the avalanche, and curtail certain collection notices, one might ask what will be accomplished? So, what if these collection notices are stopped? It may provide some relief to tax debtors, but what is not disclosed is that the debt is still there and IRS interest on the underlying tax debt, continues to compound on a daily basis! This is one huge “Oy!”
Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD and he is not employed by the EDD or any other agency of the State of California.
Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
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