An official website of the U.S. Gov An official website of the U.S. GovFirst, a big “thank you!” If you recall, last year I asked you to use your magic with the tax-writing committees in Congress to perhaps sprinkle some inspiration into their stockings to encourage legislation that improves tax administration and ensures taxpayer rights. Well, whatever Christmas spirit you sprinkled into their holiday stockings seems to be working!
A Centralized Authorization File (CAF) number is a unique nine-digit identification number issued by the IRS to tax professionals who are authorized to represent others in tax matters. Your CAF number is a security measure that lets the IRS verify that you are authorized to access your client’s information or can call the IRS on their behalf.
In our Fiscal Year 2022 Objectives Report to Congress, I’ve likened this filing season to a perfect storm. Lasting and lingering effects of the global pandemic led to historically low levels of service, enactment of new tax legislation required changes to IRS programming, manual reviews were necessitated on tens of millions of returns, and the IRS had to distribute a third round of stimulus payments – all bringing about an unusually challenging filing season, which I also discussed in my 2021 Filing Season Bumps in the Road: Part III blog.
As part of a suite of measures to provide small businesses relief from the impact of COVID-19, Congress established the Paycheck Protection Plan (PPP) loan program in March 2020. Under the PPP loan program, eligible businesses (those with no more than 500 employees) could apply for a forgivable loan that, if used for payroll costs and certain other expenses (e.g., rent, mortgage interest, utilities) within a certain period of time, would be eligible for loan forgiveness.
The Assessment Statute Expiration Date (ASED) is the end of the time period in which the IRS can assess tax with respect to a particular tax year.
If you need to file a paper tax return, consider sending it by certified mail, with a return receipt.
Submitting your tax return electronically ensures greater accuracy than mailing your return, and also results in faster processing of any refund due to you.
The 2022 filing season is underway and it is anticipated to be a challenging one for taxpayers, preparers, and the IRS for paper filed returns and correspondence. The IRS has issued guidance providing tips on how taxpayers can avoid problems, and one important tip that I cannot stress enough is that taxpayers should make every effort to electronically file (e-file) their returns, especially during this challenging filing season, because the IRS will first process the backlog of 2020 paper returns before it begins processing 2021 paper returns.
Earlier this month, I spent a week at the IRS campus in Kansas City helping campus employees and surge teams to process the IRS’s paper inventory backlog. IRS executives were asked to do this, partly to assist with the critical work, partly to support our employees who have been working tirelessly for the past two years, and partly to gain a better understanding of the paper-processing challenges the IRS faces and their impact to the entire agency. It was an illuminating experience.
National Taxpayer Advocate Erin M. Collins today released her 2021 Annual Report to Congress, calling calendar year 2021 “the most challenging year taxpayers and tax professionals have ever experienced.” The report says tens of millions of taxpayers experienced delays in the processing of their returns, and with 77 percent of individual taxpayers receiving refunds, “processing delays translated directly into refund delays.”
