The National Association of Enrolled Agents is calling on the Internal Revenue Service to look into problems with the timing of its correspondence audits of taxpayers.
In a letter from NAEA president Diana Thompson to IRS Acting Commissioner Linda Stiff, Thompson pointed out that taxpayers are often not given enough time to respond to the initial letter from the IRS requesting information before they are hit with follow-up letters that quickly escalate in seriousness.
"The enrolled agents representing these taxpayers are exasperated for a number of reasons, but the primary one is that the follow-up notices are being sent without respect to information provided in response to the initial correspondence audit itself," wrote Thompson. "In some cases, [the] IRS has lost or claims to have never received the response, while in at least one case IRS campus staff has informed an enrolled agent that the 90-day letter may indeed be issued before [the] IRS is able to process the taxpayer's documentation submission. This EA was advised to file a Tax Court petition!"
Some enrolled agents are filing Request for Taxpayer Advocate Service Assistance forms, claiming that the taxpayer is being harmed by the arbitrary fashion in which the tax law is being administered, she noted.
"No matter how we proceed, our clients' bills continue to rise due to premature - and in many cases, completely unnecessary - notice escalation," wrote Thompson. "And perhaps even more frustrating to EAs is that we find ourselves with multiple clients in the same position (e.g., a group of flight attendants or police officers who use the same EA) and we are unable to 'stop the madness.'"
She noted that taxpayers were worried by the stream of IRS notices and were often tempted to sign the proposed adjustment, "either not understanding that [the] IRS has not considered their initial response or in a misguided effort to stem further enforcement activity."
Thompson said that taxpayers who respond to the IRS in time deserve consideration of whatever support they offer of the deductions or credits they claim on their returns.
