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IRS Mail Backlog and Penalty Abatement Requests

By Kathy Ploch, CPA-Houston

 

The IRS has recently disclosed that it has approximately 11 million pieces of unopened mail, primarily due to staffing reductions as a result of the pandemic. After the government shutdown in January 2019, the IRS had over five million pieces of unopened mail. It will probably take months for staff to sort through and respond to this correspondence.

 

When faced with an IRS notice assessing your client penalties and interest for whatever reason, the practitioner’s general course of action is to request abatement of the penalties and interest due to reasonable cause. Another tool in the toolbox may be requesting the first-time abatement penalty relief if facts support the position.

 

However, if the penalty assessment is due to the backlog of mail that the IRS is experiencing, practitioners are cautioned not to use either of these abatement requests and to always be careful when using the first-time abatement.

 

AICPA is working on a letter asking the IRS to automatically curtail collection of penalties and interest due to the backlog.

 

A best practice for mailing correspondence or documents to the IRS is to do so via Certified Mail, Return Receipt Requested and make a copy of your envelope before mailing.

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