Volunteers play a vital role in our tax communities, especially for the Low-Income Taxpayer Clinic (LITC) Program and the Taxpayer Advocacy Panel (TAP). This week, we celebrate National Volunteer Week to recognize and thank those who give their time to serve their communities, assist taxpayers in need, and provide support for individuals who may not be familiar with the tax system.

For the more than 40 forms that cannot be e-filed, the IRS permits paper filing of those forms with an electronic or digital signature through a temporary policy through October 31, 2023. While the IRS makes no distinction between electronic and digital signatures, taxpayers who choose to paper file should carefully consider the differences in these types of signatures when relying on an authorized representative or paid preparer to file those forms on their behalf. Paid preparers are required by law to sign in the paid preparer’s area of the return and give the taxpayer a copy of the return.

The Internal Revenue Service (IRS) needs additional information from you to process your income tax return.

The Internal Revenue Service (IRS) corrected one or more mistakes on your tax return due to a miscalculation.

Each year in the United States, hundreds of thousands of individuals become victims of identity theft.  In fact, in 2022, the Federal Trade Commission received over 1.1 million reports of identity theft.  For the same year, taxpayers filed over 228,000 Forms 14039, Identity Theft Affidavit, claiming they were experiencing tax-related identity theft, which occurs when a bad actor intentionally steals a taxpayer or dependent’s personal information without their knowledge or consent and uses it to file a fraudulent tax return.

National Taxpayer Advocate Erin M. Collins released her statutorily mandated mid-year report to Congress. The report expresses concern about continuing delays in the processing of paper-filed tax returns and the consequent impact on taxpayer refunds. At the end of May, the agency had a backlog of 21.3 million unprocessed paper tax returns, an increase of 1.3 million over the same time last year.

In December 2015, Congress required the IRS to hire private collection agencies (PCAs) to collect some of its inactive tax receivables. An inactive tax receivable includes, for example, a tax debt that the IRS removed from its active inventory because of a lack of resources or inability to locate the taxpayer; because a year has passed since the taxpayer or his or her representative interacted with the IRS; or because more than two years have passed since assessment and the account was not assigned for collection.

To understand the significance of this provision, it’s essential to first understand the existing issue.  Under the current law, the IRS applies the “mailbox rule” in IRC § 7502 to paper submissions. This rule allows the IRS to consider the payment or the filing of a tax return timely as long as it is postmarked by the due date, even if received days or weeks later. However, the “mailbox rule” does not apply to the electronic transmission of payments or to the electronic filing of time-sensitive documents, except documents filed electronically through an electronic return transmitter. So, if the taxpayer submits the same tax return or payment to the IRS electronically on the due date, the IRS may consider the return or payment late if the IRS receives and processes it the next day. This dichotomy can harm taxpayers who make timely electronic submissions and payments, and it favors paper transmission over electronic transmission – exactly the opposite incentive the rules should provide.

Have you moved since you filed your 2022 tax return? If so, make sure you update your address with the IRS now.

The IRS expects to issue all refunds for individual returns that do not have errors (or other issues that would delay processing) by direct deposit and paper checks. But if you have not received your 2022 tax refund by the end of December, you will need to update your address in order to receive it timely. That’s not the only reason you should keep your address up-to-date.

The Letter 5972C is mailed to you because there is a balance due (money you owe the IRS) on one of your tax accounts.

For tax year (TY) 2019, there were nearly 34 million returns filed between the postponed period of April 16, 2020, and July 15, 2020, and for TY 2020, there were nearly 29 million returns filed between the postponed period of April 16, 2021, and May 17, 2021.  Without IRS intervention, any claims for credit or refund filed during the postponed period three years later that included withholding or estimated taxes would have been denied because the withheld amount(s) would have been credited to the taxpayer’s account as of April 15, outside the three-year lookback period.

The IRS corrected one or more mistakes on your tax return.