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    Thursday, April 25, 2024

    Congress asks IRS to stop fines for taxpayers caught in backlog

    WASHINGTON — The Internal Revenue Service is under pressure from a large group of lawmakers to stop penalties and pause automated collections from taxpayers whose returns have been caught in a processing backlog.

    In a letter signed by at least 216 Republicans and Democrats from both the House and Senate, the legislators urged the IRS to streamline the processes for resolving penalty-abatement issues and amended tax returns. They also asked for a halt in automated collections until the agency could work through some of the backlog and give relief to taxpayers who had already paid at least 70% of their taxes.

    The IRS had more than 10 million unprocessed tax forms as of December, according to the letter, led by Senators Robert Menendez, a New Jersey Democrat, and Bill Cassidy, a Louisiana Republican. The IRS has said it generally starts a tax season with fewer than 1 million unprocessed forms. Representative Linda Sanchez, a California Democrat, is leading the effort in the House.

    The IRS has faced additional scrutiny from lawmakers in recent weeks as the agency has warned that taxpayers could face long delays in receiving their tax refunds this year. In addition, the Taxpayer Advocate Service, or TAS, which helps resolve taxpayer issues with the IRS, has had to reject many cases because of a record number of problems.

    “This has made it impossible for frustrated taxpayers to find any help,” the lawmakers said in the letter to Treasury Secretary Janet Yellen and IRS Commissioner Chuck Rettig. “When our constituents cannot get assistance from the IRS and TAS, they contact us, and we have our hands tied at this point as well.”

    The IRS said it has stopped some notices and is looking at other ways to assist taxpayers, but points out it must have congressional approval to do everything the lawmakers are requesting.

    “The IRS does not have the authority to stop all notices as many are legally required to be issued within a certain timeframe, and it is impossible to suspend them without congressional action,” an IRS spokeswoman, Jodie Reynolds, said in a statement. “We remain committed to working with Congress to explore every option available to provide relief to taxpayers.”

    The IRS began accepting tax returns on Monday for the 2022 tax season, which runs through April 18 for most taxpayers. The IRS recommends taxpayers double-check their returns to make sure everything is accurate, file electronically and request to receive their refund via direct deposit for the best chance of avoiding delays.

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