While Mr. Rettig, commissioner of the Internal Revenue Service continues to work with
congress’ limited budget. The IRS has now decided to halt notices, will this be a good thing? Maybe, maybe not. The commissioner has come out and spoken publicly; frankly setting the bar pretty low this year. As he mentions that this will be a “Challenging season”. Any tax professional or taxpayer that has mailed anything to the IRS, it just seems that whatever we sent, disappeared from the universe.
The backlog is bad; however, it seems that the IRS always manages to cash the checks. For those envelopes that had a check and a tax return? Yeap! Same thing! They only cared about the check and disregarded anything else. Well, that’s convenient.
The purpose of halting the notices is to allow them to catch up. Many people were receiving notices from IRS saying: “Hey you haven’t filed” – IRS, actually they have, you just cashed the check but forgot about the return! Halting these notices will likely refrain taxpayers and professionals from mailing duplicates, not amplifying the problem. Halting some letters may be good…
BUUUT! Not so Fast! Halting notices that notify taxpayers that they have outstanding balances? THIS is going to be UGLY. Having worked with troubled taxpayers the better half of my career, I can tell you that people that own money to the IRS WAIT until the LAST MINUTE to pay. This will only put those taxpayers in worse situations. They will accumulate more penalties and interests. They will have no pressure of paying, securing an installment agreement, or other settlement option, so why BOTHER?
To recap, GOOD for the IRS to catch up, BAD for the people that will not be notified of
outstanding balances, and UGLY for those serious delinquent taxpayers. Why? Because when the letters resume, get ready for a tsunami.