Since the Internal Revenue Service (IRS) announced in December that the filing season would be delayed by two weeks, a steady stream of members have called the American Institute of CPAs (AICPA) with their various concerns during this busy season.
The AICPA keeps track of these problems to see if they are systemic or issues unique to a few individuals. For example, members recently called us regarding erroneous notices they had received for Form 3520 foreign trust reporting. The AICPA started talking with its members and realized it was a systematic error. Through various calls and a formal comment letter, the issue was brought to the attention of the IRS. The IRS had not been aware of the issue until the AICPA took action. Soon after, the issue was resolved.
Below are some of the issues that we are currently hearing from our members and which we are urging the IRS to resolve:
• Delay in Release of Forms: Last year, the federal government shut down in October, a critical busy season for practitioners filing extended 1040s and business returns. In the aftermath of the shutdown, the start of filing season was delayed and forms were released late (for example, instructions to Forms 1065 and 1041 were released mid-February), further delaying the filing of these returns.
• Practitioner Hotline: With the IRS saying they expect to answer approximately 61 percent of the calls to the Hotline, it’s not a surprise that AICPA members are concerned about wait times, which are often two hours or longer during filing season. Practitioners are then transferred to various IRS staff, explaining their client’s situation to each IRS employee, only to find out he or she is not the appropriate person to help them. We have also heard from members stating there is a five-issues limit on each phone call. Therefore, if a member has six separate client issues to discuss, the member must call back to resolve the sixth issue.
• Form 1099-K Underreporting Notices: The IRS uses Form 1099-K and other information to compare credit card receipts to total receipts for similar businesses. If a taxpayer’s receipts are not similar to its industry’s average, the IRS sends the taxpayer a notice. However, many businesses may have legitimate reasons for why the credit card sales and total sales revenue do not fit the industry average.
• Refunds for Prior Years: Many members are understandably frustrated with extended delays in refunds for their clients. When practitioners have called the IRS to seek an explanation for the delay, they have been told the returns are being reviewed to prevent identity theft. However, the excessive amount of the delays has been a growing problem.
Our members are the pulse of the community. We hope to hear from them, both when there are problematic issues and when good resolutions occur. If you would like to communicate an issue with us, please call 1-888-777-7077.