A substantail number of members of Congress sent a January 26, 2022 letter to Treasury regarding the IRS processing backlog and problems taxpayers are having with processing returns and amended returns, and dealing with IRS collections.
The letter notes that:
“As of December 23, 2021, the IRS continued to have a backlog of 6 million Forms 1040 (Individual Income Tax Returns) and 2.3 million amended individual tax returns. In addition, the IRS has 2 million Forms 941 (Employer Quarterly Tax Returns) that must be processed before the nearly 500,000 amended Forms 941 can be processed. 1“
“In many cases, the delayed processing of amended returns has been devastating to small businesses in our communities whose applications for emergency loans from the Small Business Administration have been caught in limbo nearly two years after the COVID-19 pandemic began. The situation has deteriorated to a point that the Taxpayer Advocate Service (TAS) will no longer accept cases solely involving the processing of amended returns. 2 This has made it impossible for frustrated taxpayers to find any help. When our constituents cannot get assistance from the IRS and TAS, they contact us, and we have our hands tied at this point as well.Letter, January 26, 2022
The letter requests that the IRS consider the following measures to bring immediate relief to taxpayers, and reduce the backlog, during this tax filing season:
- Halt automated collections from now until at least 90 days after April 18, 2022;
- Delay the collection process for filers until any active and pending penalty abatement requests have been processed;
- Streamline the reasonable cause penalty abatement process for taxpayers impacted by the COVID-19 pandemic without the need for written correspondence;
- Provide targeted tax penalty relief for taxpayers who paid at least 70 percent of the tax due for the 2020 and 2021 tax year; and
- Expedite processing of amended returns and provide TAS and congressional caseworkers with timely responses.