Recent efforts by the government to stop the spread of the coronavirus among its workforce is making it nearly impossible for some taxpayers to resolve their ongoing disputes with the IRS. To comply with the Center for Disease Control (CDC) COVID-19 mitigation guidelines, the IRS has had to suspend many agency functions resulting in severally reduced phone capabilities, closed offices and reduced staff at offices across the country.
At the same time large numbers of IRS workers are sidelined, the agency is facing one of its busiest periods. Tax season is currently in full swing, the IRS has to process COVID-19 stimulus payments, and the Service continues to pursue enforcement matters not suspended by the recently announced taxpayer relief program, the People’s First Initiative (PFI).
Examples of the challenges taxpayers face are as follows:
Problems with Existing Liens and Levies
Tax practitioners are uncertain how the IRS intends to handle existing liens.
The PFI states new automatic, systemic liens and levies will be suspended from April 1, 2020 to July 15, 2020. According to a memo circulated within the IRS, this statement means the IRS is temporarily suspending new levies issued by field collection employees and by its automated collection system.
The question is whether the IRS plans to automatically review current levies and if it will suspend them in certain situations, for example, where taxpayers have lost their jobs due to Covid-19.
Taxpayers are encouraged to contact the IRS through the revenue officer assigned to their case or by reaching out to their local taxpayer advocate office if an already-enacted levy is creating a hardship situation. Reaching a Taxpayer Advocate or a Revenue Officer has been a considerable challenge for many tax practitioners, however.
contact a member of Withum’s Tax Controversy Services Group.
Discharging Tax Liens
Another challenge for taxpayers is getting tax liens discharged. The IRS has stated it will not issue new tax liens and will continue to release existing liens when the facts support this decision. But some tax practitioners have encountered difficulties finding an IRS agent who can help them process lien discharge applications for clients seeking to have a lien removed so that the owner can sell property.
The IRS has stated that applications submitted using the e-fax line listed in Publication 4235 will be processed normally and assigned within 10 days. Applications mailed to the IRS aren’t being processed because Lien Advisory currently lacks mail service.
Reduced Phone Line Assistance
In late March the IRS informed tax professionals the Service was shutting down many customer service phone lines, including its practitioner priority service line, due to staffing limitations. Call centers across the U.S. have also closed and general live phone assistance is currently not available.
While the PFI, designed to help taxpayers by easing compliance deadlines, should reduce the reasons taxpayers will need to contact the IRS, to the extent matters are still active and require interaction with the government, reaching someone within the IRS has become very challenging, and at times virtually impossible.
Slow Processing of Correspondence
In a recent announcement, the IRS reported that its resources for handling mailed correspondence is very limited. In addition, the IRS said people who mail in documents should expect longer-than-usual response times, and even after normal operations resume the agency will have to work through a backlog.
If you have any questions about how to navigate through the labyrinth of the IRS during these challenging times, please contact your local Withum Tax Controversy Specialist.
Tax Controversy Services