IRS RESPONSE TO RECOMMENDATION: Current automated processing of Form 1040-X, Amended U.S. Individual Income Tax Return, is ongoing, and the IRS will continue to evaluate and discuss opportunities with developers to incorporate additional automated processing. As automation is expanded, automated adjustments are subject to review to validate accuracy while the tool continues to be refined, supporting improved performance over time. The IRS will explore establishing an electronic routing and tracking process across all Business Operating Divisions (BODs). The IRS will continue to assess incremental improvements within existing processes.

CORRECTIVE ACTION: Current automated processing of Form 1040-X, Amended U.S. Individual Income Tax Return, is ongoing, and the IRS will continue to evaluate and discuss opportunities with developers to incorporate additional automated processing. As automation is expanded, automated adjustments are subject to review to validate accuracy while the tool continues to be refined, supporting improved performance over time. The IRS will explore establishing an electronic routing and tracking process across all Business Operating Divisions (BODs). The IRS will continue to assess incremental improvements within existing processes.

TAS RESPONSE: The IRS’s commitment to adequately train employees who work ERC cases will ensure that taxpayer rights are being fully protected, and Automation is a key component to ensure the IRS is processing amended returns quickly and accurately. Taxpayers are poised to benefit from the IRS’s expansion of this automated process. However, for automation to reach its full potential, the IRS must develop an infrastructure that allows it to electronically route and track the processing of amended returns between IRS functions. The benefits of an automated amended return process will be diminished by the IRS retaining a manual and paper routing system.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 01/28/2028

IRS RESPONSE TO RECOMMENDATION: IRS understands the importance of allowing taxpayers to see the status of their amended return processing in each stage. To aid in that process, IRS has several future enhancements planned. The enhancements to the Where’s My Amended Return? (WMAR) tool focus on improving transparency in amended return processing, expanding digital self-service capabilities, and reducing demand on assisted support channels.

Below are a few of the future enhancements planned for the WMAR tool which are being developed in conjunction with enhancements to the Taxpayer’s Online Account:

• The WMAR tool will introduce clearer status messaging for amended returns suspended for CAT-A review. Taxpayers will be informed if processing of their account adjustment has been delayed and on whether any additional action is required.
• The WMAR tool will provide improved messaging for amended returns impacted by Collection’s activity. When an amended return adjustment is delayed due to a taxpayer’s account being in Collections, the WMAR tool will notify the taxpayer of the delay, advise them of any actions they may need to take and provide processing delay clarification.
• The WMAR tool will enable international taxpayers to successfully authenticate and access amended return status information online. This enhancement removes a long-standing barrier that has required many international taxpayers to contact the IRS for updates. By allowing this population to securely authenticate and receive accurate status messaging, the WMAR tool will increase digital self-service adoption and reduce inbound inquiries to assisted service channels.

These enhancements will improve the taxpayer experience by providing clearer communication about amended return delays, increasing access to online status information, and supporting the IRS’s broader goals of modernizing digital services and improving operational efficiency. The WMAR tool has already been enhanced to provide a correspondence issued status when an amended return is suspended to request missing information. Taxpayers are notified that required elements – such as a signature or supporting form – are missing and that a response is needed to resume processing.

The IRS continues to consider this request among all prioritized enhancement and critical maintenance resource needs. The IRS will continue to provide general contact information within these tools.

CORRECTIVE ACTION: IRS has several future enhancements planned. The enhancements to the Where’s My Amended Return? (WMAR) tool focus on improving transparency in amended return processing, expanding digital self-service capabilities, and reducing demand on assisted support channels.

The IRS continues to consider this request among all prioritized enhancement and critical maintenance resource needs. The IRS will continue to provide general contact information within these tools.

TAS RESPONSE: IRS enhancements to its WMAR tool will provide taxpayers with increased transparency regarding the status of their amended return, reducing taxpayer calls to the IRS. TAS appreciates the IRS’s continued diligence in identifying areas where WMAR can provide taxpayers with the information they need about their amended return and the way they prefer to receive it, thereby reducing taxpayer frustration.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: The IRS will revise existing procedures to ensure that, when a taxpayer with an open Collection case files an amended return, a digital copy is made available to Collection. This update will ensure timely awareness of amended return activity and support more informed case management decisions within Collection. The IRS intends to implement this procedural revision but is unable to commit to the September 30, 2026 timeframe as this may require changes to existing inventory routing tools. The IRS continues to consider this request among all prioritized enhancement and critical maintenance resource needs.

CORRECTIVE ACTION: The IRS will revise existing procedures to ensure that, when a taxpayer with an open Collection case files an amended return, a digital copy is made available to Collection. The IRS intends to implement this procedural revision but is unable to commit to the September 30, 2026 timeframe as this may require changes to existing inventory routing tools. The IRS continues to consider this request among all prioritized enhancement and critical maintenance resource needs.

TAS RESPONSE: The IRS’s continued effort to move toward electronic processes and digitize its workflow among its functions, including the routing of amended returns between functions, will result in improved processes and IRS efficiency. Specifically, these enhancements will improve IRS processing times and reduce errors. The National Taxpayer Advocate understands there are many competing priorities the IRS must consider when implementing enhancements, but it should move as swiftly as possible to make these changes.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: Current notices of claim disallowance (Letters 105C and 106C) already include information regarding the statutory period to file suit, appeal rights, and the availability of Form 907 to extend the two-year period. Specifically, existing paragraphs within these letters explain the two-year timeframe, the consequences of failing to act, and the option to extend the statutory period through submission of Form 907.

To improve consistency and taxpayer understanding, the IRS will reinforce employee training to ensure these existing paragraphs are selected and included, as appropriate, when issuing notices of claim disallowance. These paragraphs will remain standardized selectable content within the letters.

The IRS will also consider future enhancements to notices, including the potential addition of a sentence providing general information on where to submit Form 907. Additionally, the IRS cannot commit to the September 30, 2026, implementation date. The IRS will consider this recommendation as part of future planning and review efforts, taking into account resource considerations and competing priorities.

CORRECTIVE ACTION: To improve consistency and taxpayer understanding, the IRS will reinforce employee training to ensure these existing paragraphs are selected and included, as appropriate, when issuing notices of claim disallowance. These paragraphs will remain standardized selectable content within the letters.

The IRS will also consider future enhancements to notices, including the potential addition of a sentence providing general information on where to submit Form 907. Additionally, the IRS cannot commit to the September 30, 2026, implementation date. The IRS will consider this recommendation as part of future planning and review efforts, taking into account resource considerations and competing priorities.

TAS RESPONSE: The National Taxpayer Advocate understands the Notice of Disallowance typically includes information about how and when taxpayers can appeal the disallowance, the two-year period by which taxpayers can file suit in Federal court, and how they can request an extension of the two-year period by submitting Form 907, Agreement to Extend the Time to Bring Suit. However, a TAS review showed that all this pertinent information was not always included. Further, the Disallowance Notices as currently drafted do not include the exact date by which taxpayers must file suit, nor where they should submit Form 907 requesting an extension to the two-year period. Although limited IRS resources may delay revisions to the Disallowance Notice, these omissions as they currently stand compromise taxpayer rights, namely, the right to challenge the IRS’s position and be heard. Thus, the IRS should make these changes to the Disallowance Notice a high priority, even when considering its current resource situation.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: By September 30, 2026, the IRS will publish dedicated content on IRS.gov to improve public understanding of Form 907, Agreement to Extend the Time to Bring Suit. The webpage will provide plain-language information explaining the purpose of the form, when it is appropriate for taxpayers to use it, and general guidance regarding submission and execution. Development of this content will be coordinated with the form owner and affected BODs to ensure accuracy and consistency with operational procedures.

CORRECTIVE ACTION: By September 30, 2026, the IRS will publish dedicated content on IRS.gov to improve public understanding of Form 907, Agreement to Extend the Time to Bring Suit. The webpage will provide plain-language information explaining the purpose of the form, when it is appropriate for taxpayers to use it, and general guidance regarding submission and execution. Development of this content will be coordinated with the form owner and affected BODs to ensure accuracy and consistency with operational procedures.

TAS RESPONSE: The National Taxpayer Advocate applauds the IRS for providing taxpayers with critical information about extending the two-year period to file suit. This information and guidance will allow taxpayers to better protect their rights, including their right to challenge the IRS’s position and be heard.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 09/30/2026

IRS RESPONSE TO RECOMMENDATION: By April 30, 2026, the IRS will establish a clear and standardized extension process for Forms 907 related to taxpayers who are waiting for the IRS to consider their response to disallowed ERC claims and are facing statute expiration within 6 months, including instructions for how taxpayers may submit the form and how the IRS will notify taxpayers when their request is approved. Specifically, the IRS will initiate direct correspondence with impacted taxpayers that will include a link to an IRS.gov landing page that explains the imminent statute deadline and consequences of expiration, how to access the digital Form 907, and how to submit the executed form through an intake path. The IRS will designate a centralized unit to receive, validate, and perfect these Forms 907, and route them to the appropriate delegated employee(s) with signatory authority who will provide the taxpayer with a copy once properly executed.

Forms 907 call for a variety of routing and review paths depending on the type of claim, the function that issued the disallowance, and the status of the case. As a result, a single centralized model would not appropriately reflect the operational differences across the BODs. Existing routing procedures within each BOD provide an appropriate framework for directing Forms 907 to the applicable signing authority. By September 30, 2026, each individual BOD will review internal routing and execution procedures for Forms 907, and collaborate across BODs where it is feasible to promote broader procedural consistency. Additionally, we will pursue improved public-facing guidance through IRS.gov, and ensure operational controls are in place to route Forms 907 to the appropriate signing authority in a timely manner.

CORRECTIVE ACTION: By April 30, 2026, the IRS will establish a clear and standardized extension process for Forms 907 related to taxpayers who are waiting for the IRS to consider their response to disallowed ERC claims and are facing statute expiration within 6 months, including instructions for how taxpayers may submit the form and how the IRS will notify taxpayers when their request is approved.

By September 30, 2026, each individual BOD will review internal routing and execution procedures for Forms 907, and collaborate across BODs where it is feasible to promote broader procedural consistency. Additionally, we will pursue improved public-facing guidance through IRS.gov, and ensure operational controls are in place to route Forms 907 to the appropriate signing authority in a timely manner.

TAS RESPONSE: The IRS ensured taxpayers had a clear, streamlined pathway to protect their rights by creating a process where taxpayers can file an extension request to file suit in Federal court for disallowed ERC claims where there were six months or less remaining on the two-year statute. The IRS’s swift action to implement this process after TAS’s recommendation illustrates the agency’s capacity to quickly develop a streamlined process for taxpayers to submit extension requests. TAS understands there are logistical obstacles to applying this ERC streamlined extension request process on a larger scale (i.e., on all extension requests regardless of what the IRS disallowed). However, if the IRS quickly developed a streamlined extension process for disallowed ERC claims, developing a streamlined process for all taxpayers to submit an extension request should not be insurmountable, including developing a process by which the request can be routed to the appropriate IRS unit. Taxpayers have waited far too long for the IRS to develop a streamlined process for taxpayers to submit these forms. Congress created the extension to the two-year period as a safeguard to ensure taxpayers retain their right to file suit. The IRS’s failure to create a process for taxpayers to submit these requests significantly diminishes the value of the Congressional safeguard.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 09/30/2026

IRS RESPONSE TO RECOMMENDATION: While the IRS recognizes the importance of safeguarding taxpayer rights and ensuring awareness of statutory deadlines, the proposed approach does not align with current operational realities. Cases subject to the IRC § 6532 two-year period are worked across multiple functions, including Appeals, Examination, Accounts Management, Return Integrity Compliance Services (RICS), and other compliance and processing functions. These cases follow varying routing and review paths, and taxpayer interactions may occur at different points throughout the lifecycle of a case. As a result, assigning responsibility for tracking the statutory period and requiring specific employees (e.g., Revenue Agents or Appeals Officers) to provide advance notifications would not reflect how cases are actually worked and could lead to inconsistent application.

Taxpayers already receive formal notice of claim disallowance, which clearly establishes the start of the IRC § 6532 two-year period and explains their rights, including the timeframe to file suit. Taxpayers may independently monitor this statutory deadline or consult with authorized representatives. While the IRS will continue to explore opportunities to enhance systemic tracking capabilities through future modernization efforts, it does not believe this recommendation is the most effective or sustainable solution at this time.

CORRECTIVE ACTION: N/A

TAS RESPONSE: TAS is perplexed by the IRS’s response to this recommendation. It is TAS’s understanding that the IRS has already created the codes to be placed on taxpayer accounts indicating the expiration of the two-year period for taxpayers to file suit. The remaining action is putting the codes into use. Additionally, TAS does not understand why the IRS can’t apply account indicators to track the IRC § 6532 statute and receipt of Form 907, ensuring consistent visibility across IRS functions and improving case management. The IRS’s continued failure to implement these codes and place this indicator on taxpayer accounts makes it more difficult for taxpayers to know when exactly the two-year period to file suit expires; and once it does expire, the taxpayer has no recourse by which their argument(s) can be heard.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A