In our training for tax resolution we have always been told that tax returns usually take 4-6 weeks to post. Today I was shocked when a representative from Taxpayer Advocates alerted me that tax returns are taking up to a YEAR to post! The reason given was they are very busy this time of year. How can this be? Why does IRS not hire more people? The simplest answer: Because they can’t. The IRS agency has had extreme financial cutbacks; their workforce is dwindling, their funds are stretched, and their training seems to be subpar.
Why is this important?
The cutbacks are important because they mean longer hold times for taxpayers as well as practitioners. The extended posting time for returns means resolution takes longer while penalties and interest continue to accure.
What does it mean?
This means tax resolutions are taking longer and longer to close. As a tax resolution firm we are trying new tools to speed up processing. Also we are seeing negotiations in a new way. We are forced to change how we do business with the IRS and the State. We are implementing new technologies. We are increasing our use of automated systems and negotiating cases online. One thing is for sure if you are not keeping up with the times you will get left behind.
What can you do?
To help insure your returns post you can take a few measures to help yourself. Make sure you are sending paper returns to the correct agencies. Newer returns should almost always be e-filed. We highly suggest getting a return receipt when mailing returns. Our best tip is to take action sooner rather than later. You don’t want to lose your license or even worse.
Some effects you may see due to longer processing?
- Many clients are getting letters from state collection agencies like penn credit
- Some resolutions are taking longer
- Potential clients report angry collectors on the phone harassing them
- The penalties and interest may continue to accrue if nothing is done
- Your credit score may be impacted
- An inability to buy a home or get approval for a new rental
- Creditors may be able to see evidence of tax problems
- Applying for jobs is made difficult because potential employers are pulling credit reports
- Taxpayers report the local or federal government clearance can be held
This is one of the reasons why I always tell my clients be active and not reactive. If you know you have a tax problem, don’t procrastinate. Tax problems don’t go away by themselves. Make the decision to take care of your tax problems today.
The Bottom Line:
As I round the corner of 20 years in the tax resolution business, I am noticing many changes. IRS Fresh start, new guidelines, and new procedures. The extended waits for offer in compromise, FOIA requests, and audits. Returns taking over 6 months post. With these new changes we must update our procedures, programs, and tools we use when servicing clients. If tax resolution continues to take longer and longer as the trend would suggest, I urge you don’t wait until your license is flagged, your bank accounts are intercepted, your credit score takes a hit, or worse you end up in jail. Take Action NOW! Call 410-727-6006 and request a FREE EVALUATION!