As the world has been put on an indefinite hold, so too has the IRS.
During prior government closures, the IRS still was able to have essential workers be in federal buildings to process tax returns, sort mail, and process payments. The recent coronavirus pandemic blew that scenario out of the water due to health concerns, spread rate, and social distancing. 90% of US taxpayers e-file their tax returns online, but amended returns, IRS correspondence, and checks all still get postmarked and sent to Ogden, UT on a daily basis.
What was already an extremely outdated and behind the curve federal agency has now become akin to a snail in the race to process, post, and respond to the US taxpayer. Throughout a normal workday, the IRS receives hundreds of thousands of faxes, physical mail, checks, and online submissions, which would usually go through its normal route and receive a realistic response from the IRS. However, these days nobody is in to perform that work. The halls of the federal buildings are empty, so much so, that mail is piling up with no place to go. The IRS has recently started storing taxpayer mail in trailers on federal property due to the constraints of the US post office not being able to hold such large volumes for an indefinite amount of time .
The taxpayer community of 2020 balks at the idea that their IRS correspondence is being stored in a trailer and that someone will have to hand sort thousands of documents, but in reality what other choice was there? The IRS system is 30+ years old, tax representatives still have to fax documents, and IRS employees usually cannot respond to emails, a break in the chain was inevitable. Maybe this pandemic will spark the discussion of where our taxpayer monies should actually be going in the future.
Despite the fact that IRS is looking at a years-long backlog and the imminent need to update internal systems, the volume of tax filing anomalies that will surely occur in the 2020 tax filing season will likely trigger a wave of audits. If you will have vastly different income and debt statements on your 2020 returns, reach out to the team at MTL and have our IRS audit experts review your financials and 2020 tax filings. A letter of explanation can change the way IRS sees your returns. Our team has defended hundreds of business owners facing IRS audit and helped avoid audit for dozens of other business owners. We are here to help.