Imagine this: You owe money on your taxes, you pay it and then months later the IRS sends you a letter like that never happened.
It says, basically, pay up. Or, in IRS lingo: “If we do not hear from you and you do not petition the U.S. Tax Court, we will assess the additional tax you owe plus any applicable penalties and interest and send you a bill,” said Matt Metras, a tax preparer in New York.
Metras read those words from a notice the IRS has been sending out a lot lately. Some of his clients have gotten them, and it makes things uncomfortable.
“The first thing they want to do is blame the tax preparer, like we messed something up,” Metras said. “They’re like, ‘Well, I paid this. I don’t know what happened.’ “
The pandemic is what happened.
“When the pandemic hit, the IRS had to shut down their offices,” said Cesar Bocachica, an accountant for a firm in Virginia called ProSport CPA. But, “the correspondence, the letters, the checks — they didn’t stop receiving them.”
So the agency built up a huge backlog: millions of pieces of unopened mail and unprocessed returns.
That has created all kinds of problems: Checks from taxpayers sit uncashed, refunds never arrive.
The delays are so bad, they’re even affecting people who bypassed the mail and paid their taxes online.
Carla Blanchard, a CPA in Illinois, paid her taxes electronically in July. And yet, the IRS sent her letters saying she didn’t. Meanwhile, “you can log into your IRS account. And when I logged into mine, it showed my payment there,” she said. “So the payment that they’re saying I didn’t make is actually posted to my account.”
The IRS phone lines are backed up, too, so it can take a while to get through to the agency, if you can get through at all.
All of this can be confusing and upsetting for clients, said Bob Lickwar, a CPA at UHY Advisors.
“We as CPAs bill for our time, and I think that’s what they’re finding most frustrating, that they are incurring additional charges to have these issues resolved,” Lickwar said. “And to be frankly honest with you, I can’t say I blame them.”
The IRS declined to comment for this story. But on its website, the agency acknowledges the delays. It says taxpayers should not cancel checks they have sent, and that checks will be recorded on the date they were received, not opened.
The IRS also says it’s working hard to get through the backlog, and encourages people to file their 2020 taxes online.
COVID-19 Economy FAQs
What’s the outlook for vaccine supply?
Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.
How has the pandemic changed scientific research?
Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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