You’ve seen the news stories – millions of tax returns unprocessed, suspension of collection efforts, lengthy delays in receiving tax refunds. The IRS is short-staffed and in the process of hiring hundreds of new staff members to slash the backlog. Sure, the IRS is open, but its focus is on the “mission-critical” functions – the most important, central actions for the IRS to conduct its business. Bottom line, the IRS is running behind, and it will take months to recover.
The IRS faced a unique collision of events – running three rounds of Economic Impact Payments, short-staffed with lots of returns needing review because of mistakes, and being responsible for integrating new tax law changes (like the Advanced Premium Tax Credit and the Child Tax Credit) designed to give families some economic relief because of the pandemic. Add that all together and you get massive backlogs and lengthy delays.
How do these COVID-related circumstances impact you? Let’s imagine a few scenarios:
- You couldn’t or didn’t file your 2020 return
- One IRS notice came in the mail but no further correspondence
- It has been years since you’ve filed tax returns, receiving several IRS notices
- You’ve resolved your tax issue and are in an Installment Agreement/payment plan
As we know, everything got put on pause because of the pandemic. The operative word there is ‘pause.’
Just because you stopped receiving notices or haven’t gotten one yet, it doesn’t mean you are off the hook. The COVID-19 shutdown was not a free pass that wiped the slate clean of your existing tax problems. Those tax problems are still there, just waiting for the IRS to pick them up again. And that is exactly what they are doing.
The IRS is ramping back up its collections and enforcement efforts. All those notices that went unsent, all those levies and liens that went unenforced, all those collection actions that went undone, they are all coming. The IRS is playing catch-up, and you are their next target.
All is not lost. There is still time.
Those IRS notices coming to your mailbox? Do not toss them aside, stick your head in the sand and do nothing. Tax problems don’t get better over time; in fact, they tend to get worse. Take decisive action and be in control of your tax issues. When you get that notice from the IRS (note that we said when, not if), the clock starts ticking and you don’t have much time to act before the government dictates what is going to happen. More options are available to you when you choose to deal with it on your terms.
One Last Thing
The IRS will work through the backlog. Their “mission-critical” status will change to “full service” again. Sooner or later, the IRS will get to you (they always do). When they do (again, note that we said when, not if), will you be ready?