At the start of the COVID-19 pandemic, the IRS was forced to close its doors. Since reopening, there has been an extensive backlog of tax returns that the organization couldn’t seem to catch up on. Many American taxpayers have been waiting for refunds that are a year or more behind. In recent weeks, Commissioner Charles Rettig stated that the IRS backlog is due to clear up by the end of 2022.
What has changed for the IRS?
In addition to the complications of being a business in the midst of a pandemic, being understaffed has also immensely affected the turn-around for tax returns. This month, the IRS has accelerated their recruiting process in order to reach a goal of hiring 10,000 new employees. The hiring push is expected to cut tens of millions of tax returns in the backlog.
What does a clear backlog mean for 2023 filing season?
Commissioner Rettig said, “As of today, barring any unforeseen circumstances, if the world stays as it is today, we will be what we call ‘healthy’ by the end of the calendar year 2022, and enter the 2023 filing season with normal inventories.”
This means that next year, the IRS will likely resume usual enforcement and collection activity. With a lack of backlogged returns and a mostly healthy nation, in addition to thousands of new hires, the IRS can operate normally- if not better than the last two years.
What does IRS enforcement look like?
When you have a penalty or fall behind in paying your taxes, you should expect a notice from the IRS. The notice is the first step in communicating a liability. From there, your penalty can accrue interest daily until paid.
The IRS is also known for applying liens and levies, taking legal possession of your assets. Ideally, you want to contact them before this point to gain compliance and prevent worst-case scenarios.\
What if you owe back taxes currently?
At Optima, we help clients that are facing tax debt in their journey to a resolution. Give us a call at (800)536-0734 for a free consultation today.
Many taxpayers rely on Social Security to get by after retiring. Unfortunately, taxpayers with outstanding tax liabilities may be at risk of a levy on their retirement funds. How much can the IRS take and what should you do? CEO David King and Lead Tax Attorney Phillip Hwang discuss everything you need to know about Social Security garnishments.
Optima Tax Relief has once again teamed up with the IRS to provide assistance to low-income residents and other members of their surrounding community with free tax preparation services. Over 100 members of Optima’s staff registered with the United Way of Orange County, California to participate in the Volunteer Income Tax Assistance (VITA) program, which was launched by the IRS to provide free tax preparation services to those such as:
Persons with disabilities
Limited English-speaking taxpayers
Elderly taxpayers
Low to moderate-income taxpayers
The free tax help offered by the VITA program is particularly beneficial for those who are 60 years of age and older, as it specializes in questions about pensions and other retirement-related issues that are unique to seniors. Many of the community members who would qualify for the program are retired individuals associated with non-profit organizations that receive grants from the IRS. This year, however, we saw a wide range of ages attend for assistance. We were happy to help anyone that we could!
“It gave me the opportunity to offer assistance, to the people of our community, who may not have had the fortune to go elsewhere for tax assistance and walk away with a smile on their face for the help and guidance they received,” said Associate Director of Payments Steve Stoffel.
SVP of Accounting, Richard Hamiprodjo called volunteering for the VITA program “a rewarding experience getting involved with the community and helping those who are in need.”
By partnering with the IRS, the VITA program is able to offer reliable, trustworthy tax filing services for free. Optima’s volunteers for the VITA program helped with tax preparation, greeting guests, and some gathered the appropriate tax documents from taxpayers.
Associate VP of Human Resources Kimberly Carson was also a volunteer this year. She shared her thoughts and experience, saying, “It was great to have the opportunity to give back to our community and help people with getting their taxes completed. Not everyone has extra money to get their taxes done by professionals to ensure it is done correctly, so to be able to provide this service to the community is not only needed but fulfilling. Thank you for the opportunity!”
Our volunteers exclaimed how exciting and fulfilling it was to be part of this event. The culture within Optima is very community oriented, and it shows through the tenacity Optimians have for helping others and connecting. Martha Casillas, a Payments Coordinator at Optima said, “My participation as a VITA volunteer gave me a boost of self-confidence, and self-esteem within the company. Being new to the OTR family, it also allowed me to connect with other Optimians, as well as see some of the involvements OTR has within the surrounding communities.”
Case Manager Kateri Drewes added, “For me, being a VITA volunteer means taking the time to give back to my local community. I cherish the opportunity to help folks get the care and quality service they deserve!”
Optima looks forward to working with United Way to host our very own VITA site at our California office next year. Our goal is to serve more taxpayers with a bigger outreach in the Santa Ana community.
Can You Use Cryptocurrency to Pay Taxes? While cryptocurrency has left many people skeptical of its value, the American government is validating its use with some surprising changes in taxes. In the last few years, states have been racing to make cryptocurrency mainstream, in hopes that one day Americans can use it to pay their taxes.
Can the IRS Garnish Your Social Security? Many taxpayers rely on Social Security to get by after retiring. Unfortunately, taxpayers with outstanding tax liabilities may be at risk of a levy on their retirement funds. How much can the IRS take and what should you do? CEO David King and Lead Tax Attorney Phillip Hwang discuss everything you need to know about Social Security garnishments.
2022 IRS Interest Rates Increase Beginning April 1, 2022, the IRS will raise its interest rates for the quarter. These changes apply to quarterly taxpayers, such as corporations and self-employed filers.
Reporting Cryptocurrency to the IRS The topic of crypto gains more mainstream attention as the IRS takes interest in digital assets. In early March, the IRS sent out about 10,000 letters to taxpayers with digital asset transactions, requiring them to report ownership.
Cryptocurrency is becoming more common as a form of payment for products and services. As a small business owner, do you understand the tax implications? How does the IRS view crypto? Lead Tax Attorney Philip Hwang and CEO David King discuss the gray areas of cryptocurrency and tax obligations.
