AICPA Requests More Penalty Relief

The American Institute of CPAs is seeking additional taxpayer relief following the announcement that the Internal Revenue Service would provide late filing penalty relief for certain taxpayers affected by the COVID-19 pandemic for tax years 2019 and 2020.

In a September 8, 2022, a letter to the agency and the Department of the Treasury, AIPCA asked the IRS for a number of additional relief measures, including expanding the scope of relief to include non-automatically assessed penalties, amended returns, and all international information returns; and include failure to pay penalties and have the relief cover additional forms; provide relief to more tax years.

The IRS, in August 2022, announced that it would be providing, announcing that certain taxpayers would be eligible for relief from failure to file penalties for tax years 2019 and 2020, assuming those tax forms are filed no later than September 30, 2022, with refunds automatically refunded or applied to outstanding debt. The relief has been offered as a result of the processing delays due to the ongoing pandemic.

"The AICPS appreciate the IRS providing relief from failure to file for years 2019 and 2020; however, as previously stated, the IRS is urged to expand the relief to also cover failure to pay penalty," AICPA states in the letter. "We think there are many taxpayers who sent payments to IRS but due to the IRS backlog or post office delays or other delays with banks, etc., IRS didn’t receive or record the payment timely (or the IRS said it was not received timely)."

The organization argues that there are "many checks that are still sitting in unopened envelopes, and there is concern that the IRS employees may make mistakes and process payments not with the dates the envelopes were mailed, but with the dates the envelopes were received or opened."

AICPA adds that relief should be provided to those suffering COVID hardship and paid late.

"We suggest that relief be provided for failure to pay if payment was received by IRS by a certain date after the due date," the letter states.

Given the ongoing nature of the pandemic and the new variants that are being discovered, AICPA also asked that the penalty relief be extended to cover tax year 2021. It noted that the federal government does acknowledge that the pandemic is ongoing and there were high incidents of outbreaks in the winter of 2021-2022.

AICPA also asked for further clarification that the relief does not affect applications for first-time abatement of penalties.

Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

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