HENRY C KULIK, JR CPA LLC
FEBRUARY 2022 NEWSLETTER
DELAYS AND LOST TAX RETURNS WITH IRS
Many of you are experiencing delays, resubmissions, and letters requested by IRS unopened as they sit in a container bin. The IRS is in crisis mode and is expecting a difficult tax season. Note the points below:
- Since 2010, the IRS has seen a 20% cut in funding from Congress, while the workload has increased 19%. That’s almost a 40% swing!
- IRS has still not processed 6 million or more 2020 tax returns, especially those filed via paper, and more from 2018 and 2019.
- IRS hasn’t processed about 3 million amended tax returns (form 1040X) including 2018, 2019, 2020! Expect a two-year delay if your amended tax return was filed paper. Unless they lose it. I have had to resubmit tax returns manually with backup documentation. For one client, I have had to submit various items at least 3 times Agents are not able to cite a time frame on when to expect any refunds or returns processed.
- Correspondence (when the IRS sends you a notice and demands your answer be in writing via US mail) is worse with over 4.7 million letters unopened, sitting in container bin.
- To make things worse, IRS has re-started its enforcement and collections computer generated auto notice and 30-day letter penalty system. IRS is acting like it’s your fault for ‘not filing’ or ‘not responding’ to their notices even though you or I have on your behalf. We have had to contact the Practitioner Priority Service and the Taxpayer Advocate
- The AICPA, MSCPA (Massachusetts CPA society) along with various other states’ agencies have tried to have the collection notice system suspended until IRS can timely process returns, and at least open their mail.
What can you do?
Be sure to make every effort for efile use. Try to stay away from mailing anything at all! If you must use the US Postage service (which has its own problems), be sure to mail your information certified, return receipt requested. At least you’ll have a record of the tax return or letter getting to its destination. Some notices allow faxing, so if that’s what you do (IRS doesn’t consider the fax secure any longer with e-faxing) be sure to keep the receipt page that shows the connection to the IRS telephone number was successful and displays the date, time, and # of pages sent.
What about Payments due?
Please avoid mailing in coupons or attaching a check to the return like the old days. Instead have us file the return (electronically) and go to: https://www.irs.gov/payments/direct-pay to have your bank account debited for the payment.
If you prefer to use a credit card or PayPal, go to https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card. Fees are charged for use of the credit card system.
How about the State (MA) ?
Massachusetts DOR is running well. We are not seeing the kind of delays and inaction like at the IRS.I still suggest making payments electronically using the the state’s “MassTaxConnect” You do not need to register for just making a regular tax ‘balance due’ payment. Go to https://mtc.dor.state.ma.us/mtc/_/#1
The official form 1040 and state returns without extension are due April 19, 2022 this year.
Corporates are still due March 15, but with extension due September 15.
Please contact us for any extension requests! Extensions are not automatically done. Just give us a call or email!
Deduct home office due to Covid 19?
If you work your W2 job from home, there are NO deductions for home office, even if you remodeled your home to accommodate a full working office to get your work done. The IRS removed the form to report those expenses along with 2017 tax act. Instead, ask your employer for a reimbursement. Only business schedules (C, F, E) have the lines for utilities, etc.
Remember to book your summer 2022 or next tax season appointment before leaving the office or ZOOM call! Spaces are gone quickly are generally full by November before the next tax season!
Thank you all for your business
Henry C Kulik, Jr., CPA LLC