FLAT FEE TAX RELIEF
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IRS Tax Relief - Tax Debt Help
Our tax practitioners believe that there may never be a more opportune time for achieving a successful Offer in Compromise (OIC). As you read below, it is abundantly clear that the IRS has been "stretched thin" over the past 2 years. The IRS has only so many fingers to plug the dyke. Please read on:
The Taxpayer Advocate Service (TAS) released a report to Congress which detailed the processing issues the IRS had last year. The report also gave a warning for this year’s tax season.
In late December, the IRS had 6 million unprocessed individual tax returns and 2.3 million unprocessed amended individual returns, according to the TAS. It also was had a backlog of 2 million unprocessed employee quarterly tax returns and about 5 million pieces of taxpayer mail. Some of the mail was from April.
Many people still hadn’t received their refunds, and some people who filed had been waiting for nine months.
National Taxpayer Advocate Erin M. Collins said, “I am deeply concerned about the upcoming filing season.”
The delayed refunds often affect low-income people who depend on the money for basic living necessities and can cause severe financial hardship.
People had visited the IRS website to check on the status of their refunds more than 630 million times in 2021. This reflects the frustration people are having concerning their refunds.
“Telephone service was the worst it has ever been,” said Collins. Only about 11% of callers could get through to customer service. As an aside, licensed tax practitioners, like the licensed IRS professionals at Flat Fee, have a direct line to the IRS.
“People should make sure they report the correct amount on their tax returns to avoid delays, “said Charles Rettig, the Commissioner of the IRS. People who received an economic impact payment or the advance child tax credit last year should be extra careful, Rettig added. There were 11 million math error notices that were manually reviewed. The most common problem the IRS saw was with the recovery rebate credit. People use the credit to claim money they hadn’t received.
Collins said the IRS’s online tool “Where’s My Refund?” didn’t provide information on unprocessed returns or explain reasons for delays, where a return stood in the pipeline, or tell actions taxpayers could take to expedite refunds.
The IRS required an average of 199 days during 2021 to process 6.2 million responses to proposed adjustments. In fiscal 2019 the average was 74 days.
When a taxpayer responds to an IRS notice and the IRS doesn’t process the response, an action can be triggered, resulting in an adverse action or withholding a refund.
Collins gave the IRS credit for issuing 478 million economic impact payments (stimulus) and 36 million advance child tax credits. They were able to complete the additional programs even though their workforce was 17% lower than it was in fiscal 2010.
The taxpayer advocate’s report warned that the recovery rebate credit and enhanced child tax credit could lead to math error notices or other discrepancies, which would delay refunds.
To help ensure an accurate tax return, keep IRS letters together in a file where they can be located when it’s time to file your return. Incorrectly estimating the amounts of stimulus and advanced child tax credit could cause long delays in processing your return.
Now, what does the above mean should you have a tax debt. Currently, the IRS is understaffed and its budget has been cut. Couple this information with the backlog of tax returns to be processed and that is why we feel that there will never be a more opportune time for an Offer in Compromise (OIC) submission.
The number 1 reason for an OIC rejection is paperwork errors. Both "Do It Yourself" types and inexperienced tax practitioners have a high turndown rate. Normally, the IRS will take 5 months to look over an OIC submission. During this time they are laser-focused on finding any procedural reason to reject the tax settlement. But, right now, the IRS simply doesn't have the manpower to do a thorough job.
The IRS has 2 years to either approve or reject an Offer in Compromise. Should the IRS fail to come to a conclusion, the OIC is automatically accepted. If the OIC is completed correctly, it is our opinion that an eligible taxpayer (TP) should receive the IRS settlement desired.
Trying to alleviate their problems, the IRS has been overly relying on the Automated Collection System (ACS) to handle enforcement. The ACS is the Agency's computer system. Presently it is sending out Notices to Levy at an unprecedented rate. If you get levied by the IRS, good luck trying to get it released with a tax professional. Don't let a tax debt get to the status of a levy.
Over the past decade, the IRS problem solvers at Flat Fee Tax have had a 96% OIC approval rate. We know how to put together successful Offers in Compromise packages.
Have you heard the expression, "strike while the iron is hot?"
Well, right now, the iron is hot.