According to a recently published report, the Internal Revenue Service (IRS) has chosen not to include vital information in its so-called math error notices that would make them simpler and more straightforward to comprehend.
This decision was made even though the Taxpayer Advocate Service referred to the letters as “vague and confusing.”
Towards the end of the previous year, the office of Erin M. Collins, the National Taxpayer Advocate, made a recommendation that the Internal Revenue Service (IRS) make several changes that would clarify the error notices that were sent out to more than 9 million taxpayers during the most recent tax season.
In particular, as Collins pointed out, math mistake warnings do not necessarily advise taxpayers of the specific arithmetic issue that is in question; rather, they give taxpayers a list of potential errors that might have led the IRS to make a modification to their tax returns.
These changes, by the way, can sometimes affect the size of a taxpayer’s refund or even lead to the taxpayer owing money, so individuals must understand exactly which error they’re being accused of making on their taxes.
To make matters worse, taxpayers have only sixty days from the date of the adjustment to file a challenge to it in a U.S. tax court before the opportunity to do so is lost.
The Taxpayer Advocate Service recommended that in addition to providing a specific reason for the math error, the Internal Revenue Service (IRS) should also specify the exact timeframe for responding to the notice right up front in the first paragraph and that it should send the notice by certified or registered mail to ensure that it is delivered on time.
A recent report to Congress that listed Collins’s goals for 2023 stated that the Internal Revenue Service (IRS) expressed concern that such modifications would be overly cumbersome or expensive.
The Internal Revenue Service stated in its written response to Collins’s suggestions that it “issues millions of math error notices each year for both individual and business taxpayers.”
“The progression of the message has been thoughtfully crafted, to begin with, the reason for the mathematical error and the adjustments that have been made to the taxpayer’s account. From a logistical and resource-management point of view, it is not possible to personalize the dates on each notice.
Certified mail, on the other hand, is not recommended by the IRS since it is “cost prohibitive and does not guarantee consumers will receive them faster.”
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In other words, you shouldn’t anticipate any improvement in the clarity of these notices any time shortly.
The Taxpayer Advocate Service does have the ability to recommend improvements to the workflow and procedures of the IRS, but it does not have the authority to compel those changes.
The most recent report from Collins’s office stated that the IRS did not agree with the recommended adjustments to math mistake alerts. As a result, the situation is believed to have been resolved, at least for the time being.
These modifications were not the only ones that Collins and her office advised the previous year.
According to the findings of the report, the primary goals of the National Taxpayer Advocate include automating paper tax returns, simplifying the process of filing taxes electronically, increasing the size of the IRS workforce and improving employee training, and enhancing the notoriously unhelpful telephone service provided by the agency.
The good news is that the Internal Revenue Service has concurred with Collins on the necessity of putting many of these goals into action, although doing so will still, in many cases, require financing from Congress.
