AICPA Says Current IRS Penalty Relief Measures Are Not Enough

Following testimony given by IRS Commissioner Charles Rettig before the House Committee on Ways and Means, Subcommittee on Oversight, the American Institute of CPAs (AICPA) released the following statement from AICPA Vice President of Taxation, Edward Karl, CPA, CGMA:

“Over the last week, Commissioner Rettig has reiterated several times the IRS’ position on providing ‘blanket’ relief – they will not do it. However, the AICPA has urged the IRS to provide an expedited process of targeted penalty relief for late filings resulting from delays due to the COVID-19 pandemic.

“The IRS has stated unequivocally that the current penalty relief measures used by the IRS, such as first-time abatement and reasonable cause, are already enough. We disagree. Currently, there are too many taxpayers and tax practitioners dealing with the impact of the COVID-19 pandemic, and the current state of the IRS, including a reduced workforce and mail backlog, is not sufficient to provide timely relief.

“Though Commissioner Rettig has indicated his support for COVID-specific guidance, the fact is that this message has not filtered to IRS call assistors. In most cases, these call assistors have not been trained on how to address COVID-related issues.

“The recommendations provided by the AICPA are fair, reasonable, practical and address the issues that taxpayers and tax practitioners are currently struggling with daily. Additionally, these practical measures would help the IRS manage and reduce an already overwhelming backlog of mail that has slowed operations and led to unnecessary compliance actions against taxpayers. We continue to urge Treasury and the IRS to ease this burden for taxpayers across the country.”

The AICPA has urged the IRS to implement the following measures in response to the pandemic:

Provide targeted penalty waiver through the creation of an expedited and streamlined reasonable cause penalty abatement process to taxpayers affected by the COVID-19 pandemic that eliminates the need for written requests;
Develop specific coronavirus examples that qualify for reasonable cause abatement and share these examples with all telephone assistors through interim guidance; and
Develop a dedicated telephone number, or dedicated prompt, for taxpayers or their advisors to call to request coronavirus-related penalty relief.

Additional resources and a list of AICPA advocacy work related to COVID-19 can be found at: https://www.aicpa.org/advocacy/tax/covid-19.html