Sunday, April 12, 2020

State of IRS Operations Amid COVID-19 Pandemic

The IRS issued an evacuation order on March 30, 2020, to minimize the spread of COVID-19 and protect both its employees and the public. The IRS provided an update on its operations in IR-2020-68. The IRS is still on the job and adapting to the current situation along with the rest of us.

The notice encourages taxpayers to use electronic options. It will help the IRS continue to carry out its mission and aid the agency in maintaining its efforts at social distancing. It will also help to minimize backlogs.

Things taxpayers can and should do electronically include:

• Filing tax returns;
• Obtain transcripts;
• Check status of a refund;
• Make tax payments;
• Establish installment agreements in some cases;
• Apply for an EIN; and
• Check the status of amended tax returns.

Taxpayers cannot yet check the status of economic impact payments online. However, a new registration tool was announced that will allow non-filers to register to receive the payment. Is this a tax trap for a non-compliant taxpayer? A blog on that topic by Steve Mopsick can be found here. A second tool is expected to be released next week that allows taxpayers to check the status of their economic impact payment.

All taxpayer assistance centers remain closed and customer service is limited. Processing paper tax returns is also limited. Delinquent tax returns should still be filed as required. They will be posted retroactive to the date received helping to minimize late filing penalties even if processing is delayed.

I have spoken with contacts at the IRS. Despite the evacuation order and shuttered assistance centers, the IRS is carrying on with much of its normal work. Many revenue officers, revenue agents, and appeals officers are still on the job working remotely. The IRS continues to work audits, field collection cases, and appeals. It is working to issue economic impact payments, itself a massive undertaking.

The IRS is issuing guidance to taxpayers and tax practitioners daily on how the new Federal relief legislation will be implemented. It is addressing a large number of issues. Among them administering economic impact payments, launching new tools, new tax credits, deferral of tax payments, deferral of filing deadlines, how those deferrals relate to other deadlines like certain retirement contributions, changes to NOL rules, collection procedures, disseminating information to the public, and the list goes on. This all requires large scale coordination and implementation of procedures at a pace the government is not accustomed. We all know the federal government, IRS included, is not known for speed and efficiency. A little patience with the agency is due in this extraordinary time as we are truly all in this together.

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