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Larry Sayler

IS THE IRS NO LONGER able to provide basic services to the public?

When my father passed away, he left his financial assets in a trust for my siblings and me. A trust is a good estate planning tool, but there are some disadvantages. Among them: A trust has to file its own income tax forms.

My mother is the trustee. She uses a local CPA to prepare the tax returns for the trust. My mother recently received a letter from the IRS.

“Thank you for your inquiry dated Aug. 06, 2020. We have processed the adjustment indicated on your amended Form 1041 and applied the payment of $108.00, which we received on Aug. 14, 2020, to the Form 1041 account tax period ending Dec. 31, 2019. The above referenced tax period is paid in full at this time.”

That’s not a typographical error: The IRS is informing my mother that it received a check she sent nearly two years ago.

In August 2020, my mother sent the IRS an amended Form 1041, which is the tax return for trusts, along with a check for $108. Three months later, in November 2020, the check finally cleared the bank. Yes, it took the IRS three months to open the mail and deposit her check. My mother’s CPA tells me that the letter is simply an acknowledgment from the IRS that it has now processed and accepted the amended return.

End of story? A few weeks later, my mother received a second letter about the Form 1041 from the IRS. It states, “We are required by law to charge interest when you do not pay your liability on time.” It informs her that the interest charge is 27 cents. But then it says, in bold, “Amount due: $0.00.” I assume that means she does not have to pay the 27 cents, but I wish the letter would explicitly say that. You’ve got to wonder: How much did it cost the IRS to prepare and send a letter to my mother telling her that she doesn’t owe anything?

The IRS claims the significant backlog of unprocessed returns is the result of the pandemic and chronic underfunding. But I’d add another reason—something beyond the IRS’s control—which is the ever-increasing complexity of the tax code and tax forms. Call me cynical, but I believe the No. 1 goal of most elected officials is to get reelected. They want to “help” us so they can trumpet their compassion to their constituency. Every time Congress passes tax legislation to “help” us, the tax code and tax forms become more complex.

In my humble opinion, there’s no acceptable excuse for processing tax returns nearly two years after they’ve been submitted. I don’t have any solutions. But I do wonder, is the U.S. spiraling downward? Are we becoming like a third-world country whose government is unable to provide basic services in a timely manner?

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booch221
booch221
6 months ago

I filed a 2021 return electronically on April 7 and thought I was due a refund of $901. I realized I made a mistake and actually owed $789. So I did an amended return and filed it electronically on April 15 with a payment of $1690 (the $789 I owed + the $901 refund).

I got the refund for $901 credited to my checking account in about two weeks, but the IRS has yet to take the payment of $1690 or process the amended return.

I wonder if they are going to charge me a penalty and interest when it’s their fault they took so long to process the underpayment?

Last edited 6 months ago by booch221
Rich
Rich
6 months ago

My wife and I are approaching month #16 awaiting our refund from 2020’s return. Our CPA says the IRS is broken and doubts we’ll ever see it. We tried going through our congressman for help as well but they simply reported back that the IRS is behind!…What a great country we live in🫤

Carol O
Carol O
6 months ago

I received a CP24 Notice dated June 2021 stating IRS owed me a refund for tax year 2020. Couldn’t get through the phone lines, couldn’t use the auto “where’s my refund”. Had to make appt in Oct 2021 and drive an hour to have a rep tell me it was in their system and she had no idea when I’d receive it. Wrote a ltr to them Dec 3, 2021(cert & return recpt) which they got Dec 8, 2021. Not a peep until May 2, 2022 when a check and a separate ltr arrived in mailbox. That’s right, last month.

Neil Ridenour
Neil Ridenour
6 months ago

We had a goofy thing happen at COVID’s beginning–my check for $300 to the IRS for a quarterly payment in 2020 was “referred to maker” meaning it was dishonored by the bank–because the bank suspected fraud on my account. The bank subsequently admited (verbally only) that there was no fraud but would not provide a letter stating same. Meanwhile, the IRS charged me $25 penalty for a dishonored check. I paid the fee but explained in a letter what happened to the check. My IRS on-line account two years later still shows they owe me (have a credit) of $325 and, even though I wrote them again two months ago requesting reimbursement, never has provided me the credit. I also provided a bank account to which to send the credit. They cannot continue to use COVID as an excuse–if they do, they’re much less professional that I thought they were. I may have to make a second in-person trip to the IRS (usuallly a 2-hour plus wait even with an appoinment) to obtain what they admit on line they owe me.

evan rayers
evan rayers
6 months ago

I recall a similar quote in yesteryear :

Two in the links below:

“As I read this I couldn’t help thinking about an old line that, by my childhood in the 1950s, had become a kind of national folk wisdom: “As General Motors goes, so goes the nation.”
https://www.hemmings.com/stories/2019/09/05/fact-check-did-a-gm-president-really-tell-congress-whats-good-for-gm-is-good-for-america

(Indeed, as befits the U.S. rise as an imperial power, “nation” was often replaced with “world.”)
https://www.thenation.com/article/archive/gm-goes-so-goes/ 

I also recall the above saying, I suspect others do also.

We’ve all recognized multiple USA municipalities going bankrupt.
One after the other:

Didn’t the Chicago public school system both mismanage itself, to its insiders benefit, & then sue for its own errors in mismanagement with a verdict of said mismanagement as a resolution.

Again, I’m confused.
Really. I’m confused.

Elsewhere taxing localities seem to be running with a straight 10%, AMT, VAT, Etc. Etc.(rolleyes) ~ I’m not trying to be obtuse.

Good luck & Best wishes……..

Last edited 6 months ago by evan rayers
R Quinn
R Quinn
6 months ago

The tax system is way too complicated unnecessarily so. Some form of flat tax could work and save millions, perhaps billions in the process.

Nate Allen
Nate Allen
6 months ago

What ever happened to the proposals that would allow us to file on a “postcard” for most tax returns? Most other countries seem to have a quick 5-minute or less filing process.
Surely the TurboTax lobby can’t be that powerful…

Jerry Pinkard
Jerry Pinkard
6 months ago

This suggestion may be counter to what many people feel about the IRS. The IRS is a favorite whipping boy of politicians. They have cut funding so that it is seriously underfunded.

I agree that tax regs are far too complex. Again, we can thank our politicians for that. However, a properly funded IRS should be able to administer taxes much more effectively, and increased automation of processes would result in more timely handling of returns.

Personally, I favor an IRS that can conduct more tax audits. I pay my taxes and have nothing to fear from audits. The only people who should fear tax audits are tax cheats. Increased audits would generate badly needed revenue and would also incent more people to pay their taxes. People know there is little chance of a tax audit and many do not file returns or underreport their tax liability.

Mark Schwartz
Mark Schwartz
6 months ago

Larry, I think we all feel your frustrations especially with the IRS. Case in point the FDA has contributed to a baby formula serious issue here in the U.S. we are having to use the Defence act to get the Airforce to fly in baby formula….No one wants to change the status quo, but if we expect things to get better within our government we have to change them…two suggestions come to mind. Term limits for all elected positions and eliminate the lobbyists in DC. Until then, more of the same…complacency and no customer service.

Mike Wyant
Mike Wyant
6 months ago
Reply to  Mark Schwartz

End gerrymandering along with campaign finance reform. Make congressional races more competitive and term limits will be every election.

mytimetotravel
mytimetotravel
6 months ago
Reply to  Mark Schwartz

Meaningful campaign finance reform would be much more beneficial.

Of course, there is no good reason for such complexity in the tax code. When I filed taxes in the UK it took me about five minutes.

Last edited 6 months ago by mytimetotravel

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