February 4, 2022 Update
NCACPA applauds the state’s delegation to the U.S. House of Representatives for joining hundreds of their colleagues in urging the Treasury Department and the Internal Revenue Service to improve this year’s tax filing process. Read more!
Download the news release here.
January 27, 2022 Update
At the request of NCACPA, all 13 members of North Carolina’s delegation to the U.S. House of Representatives signed a letter on January 26 calling for immediate action by the Internal Revenue Service to provide taxpayer relief and reduce the agency’s processing backlog. The letter to Treasury Secretary Janet Yellen was signed by a bipartisan group of 191 House members, and North Carolina was one of the few states to secure support from its entire delegation. NCACPA’s Advocacy team, along with volunteer leaders from our Key Person Program, had been in touch with lawmakers and their staff by email and phone since January 21.
The letter calls on the Treasury Department and the IRS to implement five administrative measures:
- Halt automated collections from now until at least 90 days after April 18, 2022;
- Delay the collection process for filers until any active and pending penalty abatement requests have been processed;
- Streamline the reasonable cause penalty abatement process for taxpayers impacted by the COVID-19 pandemic without the need for written correspondence;
- Provide targeted tax penalty relief for taxpayers who paid at least 70 percent of the tax due for the 2020 and 2021 tax year; and
- Expedite processing of amended returns and provide the Taxpayer Advocate Service and congressional caseworkers with timely responses.
Following the letter’s release, the IRS announced it would grant partial relief for taxpayers by stopping some—but not all—automated notices. The Tax Professionals United for Taxpayer Relief coalition, of which AICPA is a member, released a statement in response to the action by the IRS: “We appreciate that the IRS has halted ‘automated notices in cases where a payment has been credited to a taxpayer, but no return has been processed.’ This is a good first step in offering relief to taxpayers. However, in our experience, the majority of erroneous notices are a result of numerous other circumstances where taxpayers are crying out for help, especially the underserved and minority communities. The IRS should temporarily suspend all automated compliance actions as they did with the onset of the COVID pandemic. Furthermore, we believe that if all the recommendations made by this coalition are implemented, it will go a long way to help taxpayers, tax practitioners and the IRS better navigate through this difficult tax season. Simply put, more is needed to offer meaningful relief to individuals and small businesses, and we urge the IRS to implement all of our recommendations.”
Senators Richard Burr and Thom Tillis declined to add their names to a similar letter signed by 25 other U.S. Senators. A staffer shared that Senator Burr is aware of the challenges with the IRS and is considering another letter addressing penalty relief. Senator Tillis’ office expressed concern that a line in the letter implicitly advocated for increased IRS funding, and wrote, “Given the IRS’ history of politically-motivated targeting, we are very hesitant to give any appearance that we endorse increased funding without serious safeguards in place to how it is used.”
NCACPA has been discussing targeted penalty relief with our congressional delegation since our virtual Hill visits with legislators in October and November 2021. NCACPA offers its sincere appreciation to the following House members for their support on this issue:
- Rep. G. K. Butterfield (NC-01)
- Rep. Deborah Ross (NC-02)
- Rep. Greg Murphy (NC-03)
- Rep. David Price (NC-04)
- Rep. Virginia Foxx (NC-05)
- Rep. Kathy Manning (NC-06)
- Rep. David Rouzer (NC-07)
- Rep. Richard Hudson (NC-08)
- Rep. Dan Bishop (NC-09)
- Rep. Patrick McHenry (NC-10)
- Rep. Madison Cawthorn (NC-11)
- Rep. Alma Adams (NC-12)
- Rep. Ted Budd (NC-13)