Effect of the COVID-19 Pandemic on IRS Tax Problems

Coronavirus impact on IRS Tax Problems

COVID-19 has caused significant operational bottlenecks in most organizations across the world, and the same has been true for the IRS as well. With 70 million taxpayers filing their returns for 2020 and about 70,000 employees working from home, the nation’s tax administration is in the middle of a perfect storm. Besides, the agency is handling the other important job of distributing stimulus payments with the passage of the CARES Act and other COVID-19 assistance laws. Taxpayers dealing with IRS problems can greatly benefit by reaching out to a trusted IRS tax attorney to better manage their tax problems. Continuing on the subject, in this post, we present a blogpost outlining the effects of COVID-19 pandemic and the operational burden faced by the IRS as a result on tax problems. Read on.

1. Delay in Responses

The IRS is currently operating on a diminished workforce, and as a result, is not capable of handling a flood of stimulus payment queries at once. It is, therefore, advisable to visit the official link: IRS.gov/coronavirus before reaching out directly to the IRS. The IRS has already provided answers to a number of commonly asked questions in the aforementioned link. Make it a point to go through it before approaching the IRS.

Related Blog: How to Approach the IRS Office Of Appeals

2. Limited Live Assistance

The IRS Taxpayer Assistance Centers remained closed for a while now and are just starting to reopen and take up requests. That said, when the centers remained non-operational, the phone lines, including service and all compliance hotlines were unavailable. Taxpayers need not panic if they are unable to connect with an agent for getting assistance on missed deadlines or any similar problems. The IRS, as a matter of fact, has suspended many compliance activities including audits and collection till July 15.

3. Hold on Audits

Through the “People First Initiative,” the IRS announced that all new audits are suspended and will resume after July 15. This doesn’t mean that the government will allow any suspicious or erroneous refunds. Individuals with questionable refunds including Earned Income Tax Credit returns, suspected identity theft returns, returns with highly questionable items, and wage verification issues can witness the IRS filing filters that will stop their refunds until verified.

Related Blog: Steps By the IRS to Mitigate Impact of Covid 19 on Taxpayers

4. Temporary Spare on Back Taxes

Due to the current state of operations, the IRS has put a pause on its collection enforcement activities, because of which tax levies, liens, and passport restrictions were halted till July 15. Even Offer in Compromise applications remained on hold. If taxpayers wish to set up a new payment plan on their back taxes, reaching out to an IRS tax attorney can help them set up a plan online and to start repaying their tax debts.

Wrap Up

The “Great Shutdown” of 2020 has consumed more than half of the IRS workforce in dealing with a number of critical issues related to stimulus payments and tax reliefs. This has created a huge backlog of taxpayer correspondence and tax season filing issues which may not resolve until the dust due to the pandemic settles. Although the IRS cannot do anything about the given situation, taxpayers can seek help from experts who can resolve IRS problems related to back taxes and refund holds efficiently. If you need help with IRS tax debt issues and are looking for help in Texas, reach out to the Law Offices of Nick Nemeth’s team of seasoned IRS tax attorneys in Dallas/Fort Worth. For a free and no-obligation consultation, simply call (972) 484-0829 or fill out our contact form and we will take it from there.