Posted on 05/13/2022 10:45:59 AM PDT by Red Badger
The IRS destroyed data for an estimated 30 million filers in March 2021, according to the Treasury Inspector General for Tax Administration.
The decision, prompted by a backlog of paper filings, has sparked anger in the tax community.
“It just further damages the IRS’ reputation in the business community and in the public,” said Larry Harris, director of tax services at Parsec Financial.
An audit by the Treasury Inspector General for Tax Administration revealed the IRS has tossed data for millions of payers, sparking anger from the tax community.
The material, known as paper-filed information returns in accounting parlance, is sent yearly by employers and financial institutions, and covers taxable activity, such as W-2 forms, with copies sent to taxpayers and the IRS.
“The continued inability to process backlogs of paper-filed tax returns contributed to management’s decision to destroy an estimated 30 million paper-filed information return documents in March 2021,” according to the report.
The IRS backlog, created by years of budget cuts, understaffing, pandemic-related office closures and added duties, is expected to clear by December, according to Commissioner Charles Rettig.
While the report doesn’t specify which information returns the agency chucked, the news has triggered angry responses from tax professionals, particularly after another difficult filing season.
“I was horrified when I read the report describing the destruction of paper-filed information returns,” said Phyllis Jo Kubey, a New York-based enrolled agent and president of the New York State Society of Enrolled Agents.
Missing information returns can cause a “mismatch” at the IRS, delaying refunds because the agency can’t verify details on a taxpayer’s returns, she explained.
While the eventual consequences of the decision are unknown, tax professionals have long complained about the stream of automated IRS notices, with limited options to reach the agency.
IRS steps up efforts to hire workers to process taxes
“If they’re not putting those into the system, there’s going to be discrepancies, which means potential notices that are sent out,” said Dan Herron, a San Luis Obispo, California-based certified financial planner and CPA with Elemental Wealth Advisors.
Although the IRS halted more than a dozen types of automated notices in February, Herron says the constant correspondence is still creating headaches for taxpayers and advisors.
“There were no negative taxpayer consequences as a result of this action,” the IRS said in a statement on Thursday. “Taxpayers or payers have not been and will not be subject to penalties resulting from this action.”
Brian Streig, a CPA with Calhoun, Thomson and Matza LLP in Austin, Texas, said the news was a “break of our trust,” pointing to the burden on the business community.
“Small businesses stress out every year in January trying to accurately prepare these informational returns and get them filed on time,” he said. “To see the IRS just destroy these is almost like the IRS admitting they don’t really care.”
“It just further damages the IRS’ reputation in the business community and in the public,” he added.
Zero tax bracket so that 1k gets refunded.
I always fill out a paper return, and mail it to the refund only address given by IRS. I file single, no dependents, nothing to claim and always take the standard deduction for individuals over 65. I get a pension and social security...that’s it, and include the required 1099 for my pension. I mailed my return on February 8th, 2022. It’s been 13 weeks, and the “Where’s My Refund” online link, says “We cannot provide any information about your refund.” Haven’t gotten anything in the mail from the IRS telling me there was a mistake on my form. I mailed my State tax form the same day. Took both directly to my local post office for mailing. At this point, I have no idea whether the IRS ever received my form. They’ve never been lost in the mail in all the years I’ve been filing. I’m 74.
>> I.R.S. still claims no return filed.
That could be a problem if you need a transcript for proof of income.
A few months back, I filed a paper addendum for 2020 that has yet to show up.
They wanted the Power of Attorney doc showing that I represent my 90 year-old Mom on her tax matters. I sent the doc 4 times - by email attachment, fax, and as a paper copy - they still keep for proof of POA..... Absolutely infuriating.
I can tell you the IRS payroll division is very efficient — lol. That’s where the money goes into the IRS.
Practically describes me, except I’m married and 67..............
I filed my fed tax returns electronically for some years and then it became a pain in the ass for no reason. I had to fill out forms when it wasn’t necessary. I said screw it and went back to paper forms. Last year it took about 4 months to get my meager over payment returned..
I read it is that they just gave tax forgiveness to millions, while millions more of us dutifully paid our taxes and submitted the forms.....
Winner winner chicken dinner! 👍
I don’t hold the IRS in very high regard.
Paging Lois... Paging Lois...
Nor they us...................
> The IRS used to have a rule that said they did not have to accept proof you had mailed, and they had received, a tax return, unless the tax payer sent it registered mail. Has that changed?
wow. i used to use registered mail exclusively, but in the last 2-3 years i got tired of hearing the post office clerks implore me to use certified instead of registered (i presume, because certified costs the usps less than registered). up until this year, i have not had a problem with certified, and i have been presuming safety in numbers on the presumption that the post office clerks have been busy convincing everyone else not to use registered mail also. anyway, i wonder if what you write is true and if so, should i re-send my filing (yikes)...
Here’s a question: I returned $30k to my IRA within 60 days of taking it out. H & R Block counted the $30k as income and the folks at Fidelity said the IRS would take it into account and not count it as income. The state(ca) folks did not do that. Now I have to find that other form that counts the $30k as a deposit. It doesn’t look like a tax form. Forgot the # of it.
What should I do? Thanks.
I thought they said the civic checks were not going to be taxed.
It wasn’t taxed but you still have to declare it on the form. And then it somehow impacts your total statement.
That's basically why I've never done them electronically. I tried it once, but the process involved more than I felt like getting involved in, and gave up. Never bothered again. Also, you'd think they could make the calculation of figuring what part of your social security is taxable, a little less time consuming. That always takes the longest time.
“I paper filed in January 2022, this year, for tax year 2019.
“I just submitted the online, send to my US mail request, for the status.
I.R.S. still claims no return filed.”
The CPA, who does our taxes, and all of our local family members and many friends has really been behind with all the new crap. So if we get a refund, we are at the end of do it pool. No penalty for late filings with refunds due.
Also he has found out that many of his so called lost claims like yours happen to be refunds. So he avoids this by filing late for most refunds.
After the horrors of Clintonism, I thought GWB would be an improvement.
And he was.
Sorta.
But that was before I fully appreciated the true extent of the swamp. It took Trump to reveal that.
Go to your local IRS office & FILE A CLAIM.
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