IRS Should Simplify Penalty Abatement Process, CPA Says

October 21, 2020

Ms. Erin M. Collins
National Taxpayer Advocate
1111 Constitution Avenue, NW
Washington, DC 20224

Dear Ms. Collins:

Re: Penalty Abatement

There was discussion in the Small Business Forum on September 15, 2020 on the anticipation of an increased number of IRS notices and penalties assessed as a consequence of the complexities associated with the various legislation enacted this year and the COVID 19 virus. The amount of IRS unopened and opened mail at the service centers was also mentioned and is continued to be mentioned in the press and the Commissioner's Congressional testimony.

It was indicated IRS is aware of this and hopefully would offer taxpayers relief.

The subject of IRS penalty relief has been addressed in previous National Taxpayer Advocate reports including application of the Reasonable Cause Assistor by IRS service center personnel, first time abatement, IRS ignoring reasonable cause requests, and applying first time abatement to the detriment of taxpayers.

Penalty abatement is also supposed to be available by telephone contact with IRS or correspondence with IRS by the taxpayer or tax practitioner. These are time consuming and inefficient tasks for taxpayers and tax professionals, and for IRS in having to process the correspondence or requests.

IRS has made no move to change the penalty abatement process except maybe for allowing telephone assistors to process first time abatement.

This is a very inefficient and time consuming process task for IRS, taxpayers and tax professionals. There has been no movement to simplify any procedures as IRS is drowning in unopened correspondence and open cases.

IRS has streamlined and simplified the Installment Agreement (Form 9465) to allow an automatic agreement available to taxpayers if they meet certain criteria.

I ask for consideration of an automatic penalty abatement process similar to the automatic installment agreement.

IRS can design a form for a taxpayer to request automatic penalty abatement for penalties under a predetermined amount if certain criteria is met. This would do away with unnecessary paperwork by IRS, taxpayers, and tax professionals and promote more efficiency in IRS operations.

I await reply at your earliest convenience.

Thank you.

Very truly yours,

GERARD H. SCHREIBER, JR.
Schreiber & Schreiber
Certified Public Accountants
Metairie, LA