Submitted by Richard Allen, EA, AFSP
For most of the last several months, IRS and IDOR (Illinois Department of Revenue) employees have been furloughed or been working remotely on-line during this pandemic. Recently, IRS Employees have been returning back to their normal duties. However, their work is way behind. Here are some of the issues we have found, and how to deal with them.
- IRS Service Centers were quarantined for many months. They are mostly reopened now, but U.S. mail is months behind in processing. Expect 3 to 4 months delays in processing all items sent by the U.S. Postal Service. Millions of mail items (including tax returns and checks) are sitting waiting for IRS employees to continue the processing. I personally sent in an extension check payment three months ago. The check has not been cashed YET. DO NOT FOLLOW UP UNTIL AN ITEM HAS BEEN DELAYED 4 OR 5 MONTHS. Duplicate correspondence and/or check payments will only cause more problems. Just tell your clients to be patient. Eventually IRS processing will get to your client’s mail. Expect any late penalties or interest charges to be waived.
- Some taxpayers whose returns were mistakenly flagged by filters are also in for long waits. All tax returns pass through fraud and identity theft filters, but the false positive rate is more than 50 percent. Many are inevitably for Earned Income Tax Credit or Additional Child Tax Credit, both of which often represent a substantial part of family incomes. Flagged filers are asked to submit documentation. Trouble is, there are no agents to check the docs. The IRS will get to this deluge of docs when it gets to it, which will not be soon.
- Taxpayers and tax practitioners can use the IRS website to get some information. Go to irs.gov and click on “Get Your Refund Status”. Then enter the following: • Social security number or ITIN • 1040 Return filing status • 1040 Return exact refund amount Many times, the status will show that the return in still in the processing stage. Then wait several months.
- Individuals who did not get their Economic Impact Payments will have to wait until … next year! The IRS says that those who have not received their EIPs will (not may) have to wait until they file their 2020 returns to get credits on their 2020 tax liabilities.
- Speaking of Economic Impact Payments (“Stimulus Payments”), remind all clients to keep the 2019 Stimulus refund cover letter, and to bring it back with their 2020 return next year. The payment received this Spring is actually an estimate of a credit to be shown on the 2020 return. It will be possible that many taxpayers will get a little more back on the 2020 return because of additional dependents, or changes in tax status. Rarely, will a taxpayer have to pay back any of the 2019 stimulus payment.
- Taxpayers needing IRS assistance have had trouble getting it. The IRS shut down its Accounts management phone lines, its Taxpayer Assistance Centers, its mail operations and its fax lines. The only way to get through is at IRS.gov and on automated phone lines. Regular operations are just beginning to reopen. Expect long wait times, or call backs in several weeks.
- Official IRS notices could not be mailed between April 8 and May 31. Consequently, notices going out now often have wrong dates, such as deadlines that have already passed. Corrections may appear on inserted notices, which are easily lost in the shuffle. If a reply is needed, send it in now, but expect to wait several months for a reply.
- When possible, used electronic filing of fax lines for sending returns to the IRS. These will probably be faster than using the U.S. Postal Service.
- The Taxpayer Advocate Service (TAS) is having difficulty helping taxpayers. IRS’s TAS Case Advocates have been working remotely, but ultimately their advocacy depends on the authorization of an IRS agent. The best thing is just to wait at least 2 or 3 more months for items to continue to be processed.
- What about IDOR? IDOR employees have been working at their regular office locations and remotely. MyTaxIllinois (https://mytax.illinois.gov/) can be a useful tool in the following situations:
• If an IDOR notice has been received, and the taxpayer can send a PDF file as a response to the IDOR notice.
• If the preparer wants to verify IL estimated tax payments.
• If a taxpayer wants to check on a IL-1040 refund status.
A preparer or taxpayer needs select the “Individual” column and select the appropriate choice. If replying to an IDOR notice, select “Sign Up Now” to enter Social Security Number.
In all other cases, the taxpayer needs to wait for processing of IDOR notice responses. Telephone callers can expect some wait times, and the IL agent may not have enough information to help.
For several years now, IDOR has been upgrading their processing systems. MyTaxIllinois is a significant administrative system, and is still improving. Practitioners are encouraged to use MyTaxIllinois as much as possible to process returns, check letters, notices, and statuses, and to make payments or to verify previous payments.
Senior people at IDOR continue to be committed to relationships with practitioners, especially during this pandemic.