Legitimate Taxpayer Refunds Delayed For Weeks Or Months
It is no secret that the IRS has problems with budget cuts and understaffing.
However, instead of getting better, they seem to be getting worse. And who is suffering as a result? Of course, it’s the most law-abiding American taxpayers and it’s those taxpayers with the least ability to pay.
Anti-Fraud Filters Hurting Legitimate Taxpayers
It turns out that The Internal Revenue Service’s new anti-fraud filters are flagging millions of tax returns and delaying legitimate tax refunds for weeks or months. This was revealed in a new report coming out of the acting National Taxpayer Advocate’s office and reported at accountingtoday.com.
Unfortunately, there’s no way to know if your tax return is flagged or not. Last year, the new filters flagged and stopped the processing of 1.1 million refunds. But 71% of those flagged returns were legitimate refunds. And, even though they were eventually paid, the stress put on the taxpayers is enormous.
IRS Struggles To Collect And Focuses Its Efforts On Those With The Least Ability To Pay
According to accountingtoday.com, “The IRS is also struggling to collect taxes. The IRS recently estimated it was unable to collect an annual average of about $381 billion in unpaid tax attributable to legal-source income for tax years 2011-2013. Each U.S. household that does comply is estimated to be effectively paying an average annual “surtax” of more than $3,000 to subsidize noncompliance by others.”
Of course, when a taxpayer doesn’t pay, the IRS initiates enforcement efforts. Yet, the sad truth is as pointed out in the same accountingtoday.com article, that they focus those efforts with liens against those taxpayers with the least ability to pay. While the taxpayers who are the worst offenders and owe millions in taxes are left alone. And to top off the aggravation, the poor taxpayers can’t even speak to a human being to try to work out their issues. The IRS apparently can’t afford to hire enough people to answer the phones. The National Taxpayer Advocate is urging the IRS to “prioritize phone service for taxpayers against whom it takes collection action.”
Don’t Let The IRS Problems Stop You From Filing
Despite all of the problems the IRS faces, don’t let their problems stop you from filing your tax return. No matter what your situation, you’re always better off filing since not filing is against the law. Not paying taxes you owe is not illegal, but the IRS will eventually find you. And, keep in mind that, as I just mentioned, the less you owe and the less able you are to pay makes you like low-hanging fruit to the IRS. Knowing that you are easily intimidated, they’ll come after you first.
In the event you are in an underdog position similar to what I’ve described, give my office a call. We love to help the underdog who has to wrangle with the huge IRS. We also love helping the underdog stay on the right side of this huge and underperforming entity. If you’ve been unable to pay for a while and the IRS is sending you letters, it’s best to let us help you get back on the right side of the IRS and get on with your life. Give us a call at 251.990.3261.