If you are a recipient of Advance Payments of the Premium Tax Credit (APTC) and:

• you received a warning notice from your Marketplace telling you you’re in jeopardy of losing APTC benefits next year;
• your 2019 income tax return has not yet been processed by the IRS; or
• you have received notification from the IRS about your Form 8962.

You should self-attest on your Marketplace’s website to show that you have complied with your tax filing obligations for tax year 2019.  If you do not complete the self-attestation by the end of the open enrollment period (December 15 for the federal Marketplace), you could be in jeopardy of losing your APTC starting in January 2021.

Read More

In my previous blog post, I discussed the expansion of digital service options to improve taxpayers’ experiences interacting with the IRS. Here, I will discuss the desperate need for multi-year funding to modernize IRS computer systems and infrastructure. Tax administration is at risk, and the country and the IRS need a solution now more than ever.

A Supreme Court justice famously opined that “taxes are the life-blood of government.” In that vein, the IRS is responsible for collecting approximately $3.5 trillion in taxes each year – roughly 95 percent of federal revenue. In addition, the agency is tasked with administering recurring social benefits programs like the Earned Income Tax Credit, and one-time financial relief programs like Economic Stimulus Payments in 2008 and Economic Impact Payments in 2020. Despite these enormous and critical responsibilities, the IRS is overwhelmingly reliant on “legacy” information technology (IT) systems – which the IRS’s IT function has defined as systems that are at least 25 years old, use obsolete programming languages (e.g., COBOL), or lack vendor support, training, or resources to maintain. A recent report published by the Treasury Inspector General for Tax Administration found that 231 IT systems used by the IRS are legacy systems.

Read More

Individuals, businesses, schools, and federal and state agencies all continue to be impacted by the COVID-19 pandemic. And as the IRS resumes its business operations that were partially or completely shut down at the inception of the COVID-19 national emergency, it is still facing challenges of balancing the health and safety of its employees with accomplishing its core mission: providing much-needed services for taxpayers; administering the 2020 filing season in which it has already processed over 149 million returns and issued over 119 million refunds totaling over $290 billion; guarding against identity theft, refund fraud and sophisticated cyber-attacks often exceeding 1.4 billion attempts each year; performing the extensive programming required to administer the 2021 filing season; processing any remaining Economic Income Payments (EIPs); analyzing potential legislation and preparing for another possible round of stimulus payments; providing legal and administrative guidance; incorporating new legislation changes into its operations; and deploying hundreds of Customer Service Representatives to assist with wildfire and hurricane relief efforts – all while continuing its tax enforcement efforts in a socially distanced environment. As part of the reopening, the IRS continues to evaluate what needs to be done to administer the tax laws and provide necessary taxpayer services under similar conditions in the future so that it can provide the necessary service required by taxpayers. My office will continue to advocate for improved taxpayer services regardless of the circumstances.

Read More

This tax tip simplifies available options for certain taxpayers that may need to withdraw money from existing retirement plans or IRAs to get cash or who may want to opt-out of the normally required retirement distribution payment, which may reduce additional taxes. Before you attempt any of these options as outlined, we encourage you to review the complete guidelines and rules for each situation and, when possible, consult a financial planning or retirement specialist first.

Option 1: Tax relief for retirement plan and IRA distributions

In certain circumstances, you may be eligible for special tax treatment for coronavirus-related distributions from traditional IRAs or retirement plan accounts.

To be eligible for relief, an individual must be a qualified individual, who is someone:
Read More

For the IRS, like much of the country, it seems like the focus in recent weeks has been “All COVID, all the time.” The IRS is playing a central role in administering the Coronavirus Aid, Relief, and Economic Security (CARES) Act and other federal relief efforts, most notably by issuing Economic Impact Payments (EIPs) to more than 150 million individuals. The legal, technological, and practical challenges the agency is facing are enormous, and the IRS has moved rapidly, skillfully, and creatively to tackle these challenges, albeit hitting some processing bumps in the road.

Notwithstanding the IRS’s best intentions and efforts, taxpayers continue to face significant challenges. One month after the enactment of the CARES Act, the IRS has issued 122 million payments for a total of 207 billion dollars. However, some eligible individuals have not received the correct amounts, some deposits have been sent to discontinued or closed bank or financial accounts, and some mailing addresses will still need to be updated. Taxpayers have also complained about the IRS portal, “Get My Payment.” Nevertheless, more than 100 million people to date have successfully verified the status of their payments, and more than 8.9 million people have provided bank or financial account information to accelerate their receipt of payments. That is no small feat. The IRS continues to try to remedy any issues that arise, while keeping an eye on preventing fraud. Yet there are many tax issues unrelated to EIPs that taxpayers continue to struggle with as well.

In this blog, I will highlight several topics:
Read More

The health and safety of our employees, taxpayers and tax practitioners are the Taxpayer Advocate Service’s highest priorities. Despite the challenges presented by the National Emergency around the coronavirus (COVID-19), TAS is working hard to carry out its mission of helping taxpayers resolve their IRS tax problems and protecting taxpayer rights. While our taxpayers and employees are currently faced with uncertainty in their personal lives, we want to help ease the burden of unresolved tax matters and relieve hardships to the extent possible.

Just as others have needed to adjust how they presently conduct their work, so has the Taxpayer Advocate Service. Currently, TAS is operating in a virtual environment. We have suspended all face-to-face walk-in services until further notice, but TAS continues to serve taxpayers who need our help. We are virtually communicating with taxpayers by telephone, fax and mail as best as we can, given building closures and shelter-in-place limitations in parts of the country. Many of our employees, like their fellow citizens, are teleworking and are having to adjust to school closures, new care situations, and new work processes. We appreciate your patience and understanding as our employees strive to provide the best service possible as they adjust to these new work conditions.

Taxpayers who find themselves in hardship situations or with IRS tax problems they’ve been unable to resolve directly with the IRS may contact their local TAS office by phone. Telephone numbers to each of our offices can be found at taxpayeradocate.irs.gov/contact us. Currently, we are unable to answer calls to the IRS National Taxpayer Advocate’s Case Intake Line (877-777-4778), but again, we can be reached at the local phone numbers. Taxpayers may also visit our website for tax information on common issues and the latest developments regarding the coronavirus’s impacts to TAS’s operations.
Read More

The IRS uses certain “filters” to detect and prevent tax refund fraud. While these filters do stop a substantial amount of fraud, they also flag hundreds of thousands of returns each year that turn out to be legitimate. This causes refund delays and often creates financial hardships. Notably, the filters have produced a dramatic increase in the number of taxpayers seeking TAS assistance. TAS’s non-identity theft refund fraud case receipts have increased nearly five-fold over the past three years – from about 18,500 cases in calendar year (CY) 2017 to about 92,000 in CY 2019. Moreover, about 72 percent of the case receipts for CY 2019 were accepted under TAS’s “economic hardship” criteria. I wrote about this issue in a Most Serious Problem in my 2019 Annual Report to Congress.

Some background: The IRS’s Return Integrity Verification Operations (RIVO) function operates filters designed to identify suspected identity theft and other non-identify theft related instances of fraud. One of these filters is designed to identify cases where a taxpayer files a fraudulent return in his or her own name (e.g., the taxpayer claims his employer withheld $7,000 in federal tax when the employer only withheld $3,000, which, if not detected, would cause the taxpayer to receive a refund of $4,000 more than the correct amount). This non-identity theft filter is operated, in IRS parlance, by the “Pre-Refund Wage Verification Hold” (PRWVH) program.
Read More