Source: Accounting Today / National Conference of CPA Practitioners

Erin Collins, IRS National Taxpayer Advocate, reported:

1. At this point there are 5.5 million Form 1040’s and over 4 million business returns that have been opened but not processed by the IRS.
2. The IRS goal is to process these by December 31, BUT
3. By October 15, 2021, they expect another 4 million paper returns… putting them further behind.
4. The IRS does not have enough employees to do the work.
5. The phone systems are jammed as there is not enough space in the system even to get in line for a multi-hour wait.
6. Even if they were able to hire the additional thousands or workers, there is a multi-month training lag.

DMDCPA’s opinion:

1. Likely the IRS will be working on 2020 timely-filed returns well into 2022.
2. The lack of IRS personnel to service taxpayers (especially in reply to notices) results in the IRS computer continuing to “age” the issues in the system. These then result in more correspondence.
3. Eventually, these work up to the highest levels… the Tax Court and Taxpayer Advocate Office. These replies often require taxpayers to incur additional professional fees in Appeals or Petitions for administrative issues which should have been handled at much lower levels.
4. In our opinion, Congress should pass legislation stalling collections until the IRS can reasonable reply to correspondence, but nothing is forthcoming from that arena.