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January 2019

Some Individual Taxpayers May be Eligible for Underpayment Penalty Relief

The IRS has issued Notice 2019-11, which provides for a waiver of the estimated tax penalty for individual taxpayers who paid in at least 85 percent of their 2018 tax liability on or before Jan. 15, 2019. This waiver can be requested on Form 2210 by checking Box A in Part II and including the statement “85% waiver” with the return.

On Jan. 28, AICPA sent a letter to Treasury Secretary Mnuchin and Commissioner Rettig requesting additional relief for taxpayers from penalties for underpayment or late payments of 2018 taxes:

Shutdown Impact on Tax Court Cases

Tax professionals and taxpayers with pending U.S. Tax Court cases should be aware of the following:

  • Mail or packages sent to the Tax Court during the shutdown may have been returned as undeliverable. If so, resend the filing with a copy of the proof of original mailing (i.e., a copy of the returned envelope) and retain the original as proof of mailing.
  • Petitions to the Tax Court were not processed, so the IRS may prematurely assess liabilities and send automated notices demanding payment.
  • As always, taxpayers have the option to make payments to slow the accrual of interest since interest has continued to accrue during the shutdown.


IRS Shutdown—Good News/Bad News

By William R. Stromsem, CPA, JD

Assistant Professor, George Washington University School of Business


The good news is the headlines that the tax season will start on time and that refunds will be issued. Originally, the IRS had planned to suspend issuing refunds during the government shutdown, but this was overturned to limit taxpayer frustration over the shutdown and to get refund dollars into the economy sooner.    

But the bad news is the uncertainty about other IRS services. Currently, only about 10,000 of the 80,000 IRS employees are working (without pay), and most of them were assigned to essential tasks like maintaining computers and investigating crimes. The IRS may bring back more employees to get the filing season started, but has not indicated what other functions might be staffed as “essential.”

Currently, there are no taxpayer information phone lines working and, in general, there is no one answering phones at the IRS (except for a recorded message that they are not available). Amended tax returns are not being processed. Audits have stopped, as have collections, other than those that are automated, and the loss of work days will either mean fewer audits or more superficial ones, with little time for much give and take with taxpayers or practitioners. Offers in compromise, processing of collections, 30- and 90-day letter deadlines and frozen bank accounts and liens—all not being addressed. General counsel has suspended operations, so no new rulings or regs. EINs are being issued online, but not for paper applications. Powers of Attorney forms apparently are not being processed. Transcript services are suspended.

It is tough to find out the status of services without anyone in the office or answering the phone—I called the Practitioner’s Priority Service hotline and was placed on hold, which was better than getting a recorded message; the hold was so long that I gave up, so it wasn’t much better.

The IRS contingency plan for a government shutdown assumed resumption of services by Dec. 31, and we are now weeks after that, with some adjustments from the plan being made, but no end in sight. The contingency plan gives some indication of problems and the IRS’ priorities as staffing is restored. 

Please join this blog to share your IRS shutdown experiences with other members and with our Relations with the IRS Committee currently scheduled to meet with the IRS and other tax professional organizations on Jan. 18.