#TaxTwitter has been abuzz about a flurry of notices of intent to levy (CP504) sent to taxpayers this week. The notices appear to have been sent out without regard for individual taxpayers circumstances with tax practitioners reporting receipt by taxpayers previously marked as CNC (currently not collectible), taxpayers with pending offers, and taxpayers who have already resolved liabilities.
Typically, when you receive a notice like this, the best plan is to reach out to the Internal Revenue Service (IRS) even if you aren’t sure that you know. Taxpayers are directed to call the number on the notice (for a CP504, that’s 1.800.829.8374); alternatively, some practitioners opt to dial in to the Practitioner Priority Service (PPS).
I tried both. For two days. More often than not, I received a recording advising that “due to extremely high call volume,” no one could answer. Then, a disconnect.
I finally got a real person this morning after waiting on hold for some time. Unfortunately, they advised that they could not assist because all of the levy notices were above $25,000, which would require a transfer to a different department. I was advised that there is no direct number, so if I was disconnected, I’d have to call back. You can already guess what happened.
Several hours later, I still hadn’t reached a resolution for my clients. I was irritable and I tweeted about it. Again (since I started complaining Tuesday).
I was in good company: many of my fellow tax professionals were also spending hours on hold without being able to resolve their clients’ issues (most of which seem to be related to these forms CP504).
But then I saw responses from two Brians (Brian Wolfe, CPA, and Brian Streig, CPA):
And I was a little embarrassed, to be honest. Because that’s a drum that I normally beat: it’s important to let Congress know when IRS falls down. And it’s just as important to remember that the lack of service has everything to do with a lack of resources: IRS funding has declined by more than 20% since 2010 (you can check out the numbers in graph form from the Tax Policy Center here).
Before you cheer, let me explain why that’s not a good thing. Those cuts affect taxpayer services. It means longer wait times on phones for taxpayers and tax practitioners to resolve tax issues and results in impossibly long delays in opening mail and processing requests. It means that victims of identity theft will wait longer for relief (including refunds). It means that it’s harder to dispute a tax liability. It means that it’s more difficult to resolve disputes and controversies, including Innocent Spouse matters. It means that you may not get a timely tax refund or stimulus check.
And without resources, there’s no incentive for IRS to focus audit efforts on big dollars. As the agency points out, “[t]he typical audits for higher-income taxpayers involve at least three different tax years, often include related entities, and routinely take years to resolve.” By comparison, “audits of low- and moderate-income tax returns take less time to resolve.”
(You can check out audit stats and more in the 2019 IRS Data Book (downloads as a PDF).)
I represent taxpayers on all ends of the income spectrum. And I prefer a well-staffed IRS for every single one of those taxpayers. I want to be able to get information about the process, stop ill-timed collections, and negotiate the best deals for my clients as quickly and efficiently as possible. That’s the best result for all: IRS can close those cases and my clients can sleep at night.
So, that’s why when I saw those tweets, I was taken slightly aback. I constantly advocate for a funded IRS – because that benefits taxpayers and this time, I hadn’t. So, I stopped whining for a bit and like my colleagues, reached out to my Senators and my Representatives.
I was subsequently asked to share my letter, so I am (with some language explaining who I am and where I live/work in their districts redacted or lightly edited) below:
Dear Senator Casey:
My name is Kelly Phillips Erb and I am tax attorney.
I have a good working relationship with the IRS, and was even on the dais at the National Press Club for the Tax Commissioner’s Annual Speech a few years back at the request of then Commissioner John Koskinen. I say that to offer context, since I know that the sense is that tax practitioners are generally adversary to IRS. While I certainly want to protect and advocate for my taxpayers, I also have respect for those at IRS.
That said, the current level of service provided to tax practitioners and taxpayers is appalling. The mail is not being opened and lien and levy notices are being generated, alarming taxpayers that their property may be seized. In some cases, these notices would be administratively barred due to pending Offers, etc., but the IRS is simply not opening the mail.
Checks and wires are being lost and misdirected. Some clients have called in a panic because they are receiving bills for tax liabilities that have already been paid.
The most frustrating part is that you cannot reach anyone at IRS to resolve these issues. For example, if you call the number on the levy notices (1.800.829.8374) and scroll through the menu, you will eventually hear a message that you cannot reach an agent because of “extremely high call volume.” The line then disconnects.
The Practitioner Priority Service (PPS) is no better. If you can get through (most recently, it took me two days), you will be disconnected.
It’s important to understand that many of these notices are time-sensitive and the inability to reach anyone – by mail or phone – has real consequences. Taxpayers can have their property – including bank accounts – seized. Wages and Social Security payments can be garnished. These are terrible results in the best of times, but are especially difficult in the middle of a pandemic when many people are out of work.
I know that it’s popular to complain about the IRS, but that’s not what I am doing. I am asking you to focus attention on the agency that collects our revenue and keeps the doors open and the lights on in government. Those lost checks are lost opportunities and lost dollars. Inaccurate or late notices are efficient and cost not only taxpayers time and money directly, but also waste government resources. And trying to collect from those who simply do not have the money at this time is not just illogical, it’s cruel.
I ask that you take immediate action:
- Ask the IRS to stop sending out notices without opening the mail;
- Insist that more phone and other representatives be made available to taxpayers and practitioners;
- Direct that levy and other notices receive automatic extensions; and
- Finally, please adequately fund the IRS.
Thank you for your consideration.
Kelly Phillips Erb
Hopefully, that gives you some direction/inspiration for your own letters. You’re welcome to use some or all of my language in your own letter (except for my name, of course, because that would just be weird).
And if you’re looking for the best folks to send your letters to, you can find your Representative (with contact info) here. You can find your Senators (with contact info) here.