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BACKLOG UPDATE X


Lee B

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 According to the Taxpayer Advocate the latest numbers are:

1.  8.6 Million unprocessed personal tax returns

2.  3 Million unprocessed business tax returns

3.  5 Million unanswered pieces of taxpayer correspondence

One of my family members filed an amendment of their 2018 personal tax return back in the summer of 2020.

They call the IRS and check every month. To date their amended return has been logged as "received"

however as yet no one has been "assigned" to work on their return.

 

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On 1/13/2022 at 8:09 PM, TAXMAN said:

Wonder how many of the 8.6 million consist of older than 2020 tax returns.

I have clients who were told that they never filed in 2019.  NOT TRUE.  My proofs of filing are probably laying in that 5 million pieces of correspondence.  I don't have a good feeling about this year.

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Just heard from a friend tonight who called about his 2019 refund (not received). Filed on paper just as all the craziness was hitting. His return is in they system, and the agent could see it.  Apparently one page's scan didn't go quite right but all info was there (super simple return, a 1099-R and a 1099-INT; refund less than $60) but she could not release the refund for some reason he did not understand but had to do with two departments trading the return back and forth between them, electronically. 

I mean, really?

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A client made an $8000 extension payment using Direct Pay on 5/17/21.  The wife made the payment and used her social security number.  The irs didn't credit the payment to their account. 

Return efiled 6/6/21.  Irs sends letter 7/5 saying client owes $7120.  We write back with Direct Pay confirmation & proof of bank transfer.  Irs sends letter 8/9 stating client now owes $7160.  Client is very nervous.  Client gets more nervous when they can't get through to irs on phone.  For some reason, when I tell client the irs is about a year behind in opening mail, they get more nervous.  Client wants to pay amount to stop further notices.

We write irs telling them if they opened and processed their mail, they wouldn't be sending us this 2nd notice; however, to end this futile process of receiving IRS notices and sending replies that go unprocessed until the IRS levies client's bank account for tax they don’t owe, here's a check.  When you bother to get around to processing this and our previous correspondence and realize you screwed up, apply the $7200 overpayment to the taxpayer's 2021 account. 

On 1/3/22, a mere 4.5 months from our second letter to the irs, the irs sent a letter, account transcript, and refund check for $7240.  Maybe they are catching up.  Or maybe this was just a lucky fluke. 

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1 hour ago, Abby Normal said:

If the IRS just scans all paper returns received,

Do they?  In the Taxpayer Advocate's report to Congress last week, the first recommendation was:

Quote

Utilize scanning technology and reduce barriers to e-filing. The IRS could reduce its backlog of paper tax returns by using scanning technology to machine read returns, as many state tax agencies have been doing for more than ten years. ... These Taxpayer Advocate Service (TAS) recommendations would reduce the need for IRS employees to manually transcribe the data from paper returns – the primary cause of the backlog and of transcription errors that led to math error notices and refund delays...

 

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1 hour ago, Abby Normal said:

If the IRS just scans all paper returns received, perhaps they need to let individuals scan their paper returns and upload them securely. Would prevent mountains of mail sitting in trailers.

I have no idea what their process is.  As some have said, include a check and send to the with payment address seems to get some response.

Self scanning is not likely ever coming.  I suspect the IRS is grabbing data only, not the entire form, so self scanning would not work (plus the skew and stretch issues).  As someone who prepares data files for others to efile, the IRS is the least cooperative/friendly.  While I would rather it be different, it does have the appearance (all tax agencies, not just IRS) of protecting turf.  IOW, if it was reasonably easy to efile, many would be out of a job, and/or many would have a less complicated world to go to when they punch their ticket and go to private practice.

Heck, some years there are form "changes" of an 1/8 inch or so, for no apparent reason (no new data, no change in overall placement, etc.).

There are simply pressures outside of getting data into tax agency "silicon".  Even my fav, SSA, has paper form issues.  (Their efile is very stable!)  Paper W2 forms need to be "approved" every year.  The 2022 paper W2 was posted a few days ago.  But, the black and white printed approval process will not even start until late Q3 or even Q4.  I suspect the same folks who approve the forms (there are only one or two) have other priorities/responsibilities, but still... On top of that, the mailing address they give is not recognized as valid by USPS, so one cannot use priority mail to get tracking info!

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There are other "self" issues.  Consumer printers are completely unreliable as to where they print on a page.  The "printable" area on a page may not be properly reported by the printer's software, resulting in not being able to precisely print at a certain location.  In my case, I have to provide a way for users to manually adjust the print position.  Just the slop of the paper feed system induces a certain amount of inaccuracy.  (Jet printers generally flip the paper only once so pre printed numbered checks have to be reverse collated in the tray, and jet printers cannot print as close to the bottom of the page as other printers.)

Then there is the issue with PDF's no longer being reliably accurate as to what the preparer wanted.  The user can substitute fonts, adjust margins, etc., making the entire reason for a PDF (so it looks the same on any printer) moot.  I get that issue nearly daily - why can I not save a "check" as a PDF and have someone else print it?

Print quality is another issue.  No bold, must use certain font's and sizes, etc.  Of course, the user can cause issues there, by settings such as econo mode, inferior paper, old ink/toner, etc.  Another issue is duplex.  It is allowed on many forms, but consumer printers and paper choices may cause bleeding, which puts the submitter AND us at risk for penalty, so no duplex for us.

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The slow processing is yet another reason all TP's should spend the effort to not get into a refund situation, or a penalty situation. I suppose that puts extra work (if wanted) and extra income opportunity for preparers, as preparing a mock return before the deposit deadlines are getting to be a necessity, unless depositing 100% of prior year is not going to cause a refund situation.

It will be interesting to see how fast returns are processed for 2021, such as for those who had a new child during 2021.  Since the IRS failed to provided the planned method of reporting new births, those parents were not able to receive the monthly child payments, and will possibly/likely be wanting to get the credit (likely a refund) ASAP.  Al eligible parents will be wanting their remaining amount of the credit as well...

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The 3 Million unprocessed business returns included 2 Million unprocessed Form 941 & Form 941 X returns.

I have a client with an unresolved overpayment on their 2020 4th quarter 941.

I have been waiting to see if the IRS will refund the overpayment, no communication yet.

I have wondering how much longer I should wait before I file a 941 X, even though it would probably take a long for my client to get their refund.

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JUST PLAIN CRAZY......My client just received a Letter 525-M, a 14 page Notice of audit for 2019.  The end result is that the 2019 refund has been frozen until and if they agree to the findings that the IRS owes them an additional $4.00!  Yes, you read that right $4!  Of course our letter of response to their inquiry is lying in the 5 million pieces of unanswered correspondence.  I have a terrible headache and am getting more depressed and unhappy by the hour.

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2 hours ago, mcb39 said:

JUST PLAIN CRAZY......My client just received a Letter 525-M, a 14 page Notice of audit for 2019.  The end result is that the 2019 refund has been frozen until and if they agree to the findings that the IRS owes them an additional $4.00!  Yes, you read that right $4!  Of course our letter of response to their inquiry is lying in the 5 million pieces of unanswered correspondence.  I have a terrible headache and am getting more depressed and unhappy by the hour.

Marilyn,

 

Hang in there. At this point, all we can do is laugh and do the best we can. 

After all, it's a slow moving train wreck, maybe we can jump off?

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Just as the ability to repair physical things will always provide a living, so will dealing with government rules.  As frustrating as it is, it is still a good reliable source of lifetime employment in any location across the country (even before remote work taking over).  It is what I tell myself certain days, such as the Friday before end of year payroll forms are due out...

How about WA Cares for grins?  Tell employers to withhold, change the rules to still require withholding, but not remitting, and now a complete pause - with future instructions as to how to return what was withheld.  While I did not follow too carefully, it walks like another case of a private concern offering some magic beans to politicians for their next campaign, while making a profit themselves, and in this case, the residents fought back and at least temporarily won.

While I have my own feelings about the ever growing forcing of state "saver" programs (three states so far), I will undoubtedly buy stock when the company providing the back end, money management, and legislation samples, and selling (no pun intended) the politicians to their version of the holy grail, goes public (delayed by COVID).

Or how the ERC for W4 was taken away after the fact, and the funds given to other "interests".

Or how the Form 7200 which was supposed to get money to employers within weeks, took months, if ever, to get processed.

I am still waiting for a refund for a deceased person, filed in Spring 2020.  Had to be paper filed (I cannot remember why ATM), and while not a large amount, keeps the estate open while waiting.

Then again, it could be the looming end of year payroll reporting deadline talking... ;)

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