IRS and States Swamped by Last-Minute Tax Filings

[kcjenkins]

The Internal Revenue Service is struggling to respond to an onslaught of tax returns filed on April 15, which is delaying acknowledgements to both federal and state returns.

“Due to the significant increase in federal and state submissions transmitted on April 15th, the length of time to create federal acknowledgments and make them available for retrieval is taking longer than expected,” the IRS said in an email to tax professionals Tuesday evening. “The IRS is closely monitoring the acknowledgment rates and is working to close the gap as a top priority.”

The IRS added that the majority of state tax returns are linked to the acceptance of the federal return, so the length of time it takes to make the state return available for state retrieval has also increased. It asked tax professionals not to re-transmit any tax returns if they have not yet received an acknowledgment.

“As the federal backlog decreases, the state submissions will then be ready for state pickup,” said the IRS. “In the interim, please do not retransmit any submissions awaiting acknowledgment if the IRS has issued a receipt. We thank you again for your patience and support.”

The IRS is working its way through the backlog. Anecdotally, Intuit sent back an acknowledgment Tuesday afternoon that the IRS had accepted a tax return that had been filed close to midnight on April 15 with TurboTax.

[Gail in Virginia]

I now have all of my federal acknowledgements and am just waiting for state. I really like that Virginia has an extra 15 days after the federal to file!

[kcjenkins]

[JJStephens]

Just got my last handful of Fed acks, still waiting on 5 state acks (4 different states).

[Jack from Ohio]

The Internal Revenue Service is struggling to respond to an onslaught of tax returns filed on April 15, which is delaying acknowledgements to both federal and state returns.

“Due to the significant increase in federal and state submissions transmitted on April 15th, the length of time to create federal acknowledgments and make them available for retrieval is taking longer than expected,” the IRS said in an email to tax professionals Tuesday evening. “The IRS is closely monitoring the acknowledgment rates and is working to close the gap as a top priority.”

The IRS added that the majority of state tax returns are linked to the acceptance of the federal return, so the length of time it takes to make the state return available for state retrieval has also increased. It asked tax professionals not to re-transmit any tax returns if they have not yet received an acknowledgment.

“As the federal backlog decreases, the state submissions will then be ready for state pickup,” said the IRS. “In the interim, please do not retransmit any submissions awaiting acknowledgment if the IRS has issued a receipt. We thank you again for your patience and support.”

The IRS is working its way through the backlog. Anecdotally, Intuit sent back an acknowledgment Tuesday afternoon that the IRS had accepted a tax return that had been filed close to midnight on April 15 with TurboTax.

And this surprises whom? Last 3 years, the same thing.

For years the IRS pushed to have everyone e-file. They got their wish and now realize that they are in no way set up to handle it.

[mcb39]

WI just sent out an e-mail to tell us not to worry. If the Fed was timely filed, the WI will be considered the same.

[rfassett]

I think my outstanding State acks exceed 50. I never in the past left my office at the end of the season with as big a stack of unresolved e-files. The stack approached three inches high. In years past I might be waiting for three to five State acknowledgements. But not this year. And the chararcter of my practice has not changed one iota. So it impresses me that the IRS and whomever is responsible for the e-filing fiascos have no concept of future planning. I guess they must have assumed that everyone that had waited for the forms approvals until March 8th or there abouts would just fall in order and extend and efile ratably over the summer. Clearly they did not anticipate the rush on the system. Perhaps a campaign to the public extolling the benefits of extending (for future considerations) might be in order. Most all of us understand the extenison, but the vast majority of my clients would roll over in their grave before allowing their return to be extended. Poorly mis or underinfomed by the government.

[JohnH]

Part of the extension awareness problem is the IRS's artful way of explaining the penalties. By failing to accurately distinguish between the FTF and FTP penalty in their explanations, they confuse the taxpayer about the implications of not paying in full. I think this is because they don't mind the taxpayer extending, but they want to do everything thay can to get the taxpayer to pay in full. At the same time, they know that getting the taxpayer into the system is ultimately more important than getting the money on Apr 15. So they walk a fine line.

They have crafted the instructions in such a way that they even fool many tax preparers, who really don't understand how extensions (with or without payments) work. I see evidence of this constantly on all the tax forums in which I participate.

[[email protected]]

The federal have released a statement that if you file an extension this year due to the fact that you could not get in to file your taxes on time,

http://www.irs.gov/uac/Newsroom/Relief-Available-To-Many-Extension-Requesters-Claiming-Tax-Benefits

[[email protected]]

Penalty relief for those taxpayers who attached any of the forms that caused the delays.

[JohnH]

The penalty relief is only for the FTP penalty (0.5% per month) not the FTF penalty (5.0% per month).

So an extension request must have been filed even if the FTP penalty relief for those particular forms applies. Otherwise the huge FTF penalty will still be assessed.

[jainen]

>>Penalty relief for those taxpayers who attached any of the forms that caused the delays.<<

The press release sounds nicer than the actual notice cited. The taxpayer must make a good faith estimate and PAY it with a timely extension request, so penalty relief is only available for the small amount that you missed by. Even then you will still get an IRS letter assessing the penalty for Failure to Pay. You have to request abatement in the normal way, citing the delay on specific forms as reasonable cause. And pay the interest.

[Christian]

It is heart wrenching to consider that avalanche (mine is one) descending on the IRS at this time.

[Christian]

And i too am glad Virginia deadline is May 1st. They'll get mine on that date.