While I remain more positive than most in my opinion of the IRS, these past few months have been challenging for taxpayers and some news has already emerged that it’s not going to improve in the near future.
In my opinion, it all started during the 2012 tax filing season. With a late start to the year because Congress was wrestling with the fiscal cliff decisions until the wee hours of New Year’s Day, the IRS started off 2013 with a few weeks delay before returns could be filed and refunds could be processed. This delay was a direct result of the government’s delay, because the tax returns couldn’t be developed, nor could the tax software be programmed, until the laws were set in place.
Even before the delay, the IRS hotlines hold times increased from under three minutes to nearly 20 minutes, and only half of written correspondence was being returned within the time limits set by the IRS themselves. While there are no statistics published midyear, practitioners and taxpayers alike have noticed these time delays have increased even further.
I can speak from experience that I contacted the IRS small business department every work day for over two months this summer and I was never once able to reach an operator. After several hours on hold, the system would tell me that “due to high call volumes, we cannot take your call at this time.” At the same time, I sent a handful of letters and not one of those letters has received a response, even though a few months have now passed.
Last week, following the government shutdown, the IRS issued a statement that 90 percent of their operations had been shut down during the time of the year they normally spend preparing for the new filing season. As a result, they said this tax season would be pushed back from an original start date of Jan. 21 to a new start date of Feb. 4. The IRS also says that it received 400,000 pieces of correspondence during the shutdown, and had 1 million items in line before that.
So, what’s a taxpayer to do? The most important line of defense is patience. We all know it’s stressful to receive a letter from the IRS, but given the state of their operations, panicking or stressing will not get you a quicker resolution. Instead, if you need assistance, I would methodically document every time you reach out to them, including the number you call, the date and time, and mail any correspondence through certified mail so that you can prove you made appropriate attempts to contact them about your issue. This may help if you are trying to get penalties negated at a later time.
Unfortunately, this is not the end of this story. Congress has once again punted the fiscal debate out a few months, and the politicking will start all over this January, possibly leading to even further delays. With the new health insurance laws coming into play, it’s going to get a lot worse before it gets better.
Michele Knight, owner of Knight Accounting & Technology, is a CPA and QuickBooks ProAdvisor based in Dillon. For more info and to contact her, visit www.cpamichele.com.