I recently blogged about the IRS’s broad relief for late filing penalties for 2019 and 2020 tax returns. During the height of the pandemic, taxpayers experienced many obstacles to the timely filing of their 2019 and 2020 tax returns. Because of the scale of the problem, the National Taxpayer Advocate, members of Congress, and tax practitioner groups called upon the IRS to implement a comprehensive remedy including penalty abatements. To its credit, the IRS announced a broad late filing administrative penalty relief program on August 25, 2022, and has been automatically abating late filing penalties without the need for taxpayers to request penalty relief.

Know your rights and what to do if the IRS sends you a bill after you already paid your taxes.

Taxpayers have the right to appeal an IRS decision in an independent forum. One way that taxpayers may exercise this right is by filing a petition with the United States Tax Court. 

The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $56,000 or less, persons with disabilities and limited English-speaking taxpayers who need assistance in preparing their own tax returns.

The mission of the Taxpayer Advocate Service (TAS) covers what I often refer to as three pillars of service:

1. Protecting taxpayer rights;
2. Helping taxpayers resolve problems with the IRS; and
3. Recommending and advocating for changes that will prevent future problems.

Essentially, everything we do at TAS falls within one of these three pillars. Often on the NTA Blog I dive into topics that cover any and all of these areas but today I want to focus on the third pillar. It is what we refer to as Systemic Advocacy.

A taxpayer came to TAS after her bank returned her refund to the IRS via a cashier’s check because the bank account number on her tax return was off by one digit. Although the taxpayer provided a copy of the cashier’s check showing the full refund had been returned, the IRS would only issue a replacement refund for $20.

TAS continues to advocate for legislation that would restructure the EITC to make it simpler for taxpayers.  Despite the challenges involved, I encourage all taxpayers undergoing an EITC audit to fully participate in the EITC audit process and work with the IRS by supplying any available documentation to support EITC eligibility.

You may have heard stories about people being misled and fed false information by solar panel salespeople. Falling prey to these scams can end up costing you thousands of dollars.

Your tax return may show you’re due a refund from the IRS. You can generally get your refund faster by filing electronically and requesting direct deposit. See our TAS Tax Tip: Tax return filing is as easy as 1-2-3 for more information, including direct deposit options if you don’t have a bank account. 

The U.S. Tax Court is a federal court that Congress established to provide a judicial forum where taxpayers can contest a tax deficiency determined by the Internal Revenue Service (IRS) before paying the disputed amount. Upon the filing of a petition to the Tax Court, the Tax Court assigns a docket number to the petition, processes it, and serves a copy on the IRS. This notification process makes the IRS aware that a petition has been filed and ensures that the IRS takes the appropriate action in preparation for litigation. Unagreed examination deficiency cases that are not petitioned within the prescribed time frame (90 days, or 150 days for statutory notices of deficiency addressed to a person outside the U.S.) can be legally assessed, closed, and the collection process initiated.

Over the past year, an IRS task force, which included TAS representatives, considered public and internal comments to improve Form 8857, Request for Innocent Spouse Relief. In June 2021, the IRS released the revised draft form, which included several improvements. Commenting on IRS products is an important avenue taxpayers can use to make themselves heard and suggest improvements for tax administration. The revision of Form 8857 is one example, demonstrating how the IRS can collaborate with the public to improve its service to taxpayers and support taxpayer rights. You can view the draft form by searching for Form 8857 here.

If you’re one of several thousand people who were affected by a brokerage acquisition over-withholding, you may be issued a Form 1042-S. This has been an issue for a significant number of taxpayers, so here are the steps to take to recover the over-withheld amount. If a brokerage firm issued you a Form 1042-S for the 2023 tax year because funds were withheld and paid to the IRS from a stock conversion you were a party to, the only means to recover the over withheld amount after March 15, 2024, is to file a refund claim. In this case, a refund claim is a U.S. tax return requesting a refund. 

Your tax return may show you’re due a refund from the IRS. However, if you owe a federal tax debt from a prior tax year, the IRS may keep (offset) some or all your tax refund to pay your debt.

In my 2021 Annual Report to Congress, I identified the ten most serious problems (MSPs) facing taxpayers. One of the MSPs I would like to highlight is the IRS’s  inadequate online accounts for taxpayers, businesses and tax professionals.

Waiting on your tax refund can be difficult. It can be even more so when you are unsure about the status or why there might be a delay beyond the timeframe you expected your refund. While you are checking the status of your refund or responding to any IRS requests for additional information, make sure you to protect your personal and tax account information.

I and others have written tomes about the complexity of the tax code and the burdens that tax law complexity imposes on taxpayers and the IRS alike. Taxpayers (and tax professionals) are often left wanting to pull out their hair, and comedians often mine the tax code for fresh material, especially during tax season.

Know your rights and what to do if the IRS sends you a bill after you already paid your taxes.