TAX TIME - Know Your Rights as a Taxpayer!

Automated Taxpayer Notices Put on Hold
After being prompted by members of Congress, coalitions, and tax-focused organizations, IRS announced that it will suspend more than a dozen letters, including the mailing of automated collection notices, unfiled tax return notices, and balance due notices. Click here for the press release, which includes a full list of suspended notices.

The agency’s press release cited the millions of returns that have yet to be processed as part of the reason for suspending sending out certain letters; hopefully, this action will help alleviate confusion for taxpayers whose returns have yet to be processed. The suspensions mark significant progress being made by advocates of tax practitioners and taxpayers who have been working to minimize unnecessary burdens for filers this tax season.

IRS Parts Ways with ID.Me
IRS announced this week that it will transition away from using a third-party service for facial recognition, ID.me. To prevent disruptions to taxpayers during filing season, the transition away from this facial recognition process will occur in the coming weeks while the IRS plans to develop an alternate authentication process that will not involve facial recognition.

This announcement comes as several members of Congress such as Senator Ron Wyden (D-OR) publicly urged IRS to transition away from using ID.me and argued that the technology not only violates the privacy of users, but also doesn’t work well with people of color, women, and seniors.

Multitudes of Math Error Notices
In 2021, IRS sent nearly twelve times as many math error notices as it did in 2020 and unfortunately, that trend is likely to continue in 2022. The agency sent over 14.5 million math error notices for calendar year 2021. Joshua Beck, an attorney advisor at the IRS Taxpayer Advocate Service, cited the advanced child tax credit and reconciliation of the recovery rebate credit as reasoning for the high number of math error notices.

Hearing Updates Related to Cryptocurrency
Last week, we reported on several hearings occurring in the House and Senate. The House Financial Services Committee held a hearing on digital assets on Tuesday and invited Nellie Liang, the Undersecretary for Domestic Finance at the Treasury Department, to speak.

Several important updates came from this hearing, including Undersecretary Liang’s assertion that technology companies who are not licensed as banks should not offer stablecoins. Additionally, Undersecretary Liang shared that it is unlikely U.S. regulators will designate stablecoin issuers as “systemically important financial institutions,” which would place new requirements on the issuers. She also echoed the Treasury Department’s position that Congress needs to step in to close the “regulatory gaps” related to cryptocurrency. To see more information on this hearing, click here.