Senators Seek Taxpayer Penalty Relief Amid IRS Backlog

January 28, 2022 by Dan McCue
<strong>Senators Seek Taxpayer Penalty Relief Amid IRS Backlog</strong>
The seal of the U.S. Treasury Department. (Photo by Dan McCue)

WASHINGTON — Sens. Bob Menendez, D-N.J., and Bill Cassidy, R-La., are leading an effort to convince the U.S. Department of the Treasury and the Internal Revenue Service to provide penalty relief for taxpayers amid what they describe as the “extensive” and “ongoing” processing backlogs at the nation’s tax agency.

“While the COVID-19 pandemic has strained every federal agency, the impact on the IRS has been particularly severe,” Sens. Wyden, Merkley, both of Oregon, and about two dozen other senators wrote Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig this week. 

As of the end of December, they said, the IRS continued to have a backlog of 6 million Forms 1040 (Individual Income Tax Returns) and 2.3 million amended individual tax returns. 

“In addition, the IRS has 2 million Forms 941 (Employer Quarterly Tax Returns) that must be processed before the nearly 500,000 amended Forms 941 can be processed,” the senators wrote.

The lawmakers noted the delayed processing of amended returns has been particularly devastating to small businesses, whose applications for emergency loans from the Small Business Administration have been caught in limbo nearly two years after the COVID-19 pandemic began.

“Recognizing the extraordinary challenges of the COVID-19 pandemic, in addition to the IRS operating with antiquated technology and a constrained budget, we find the current situation alarming,” the senators wrote. “We stand ready to support the IRS and look forward to hearing how we can help you address any obstacles facing the agency. 

“However, we respectfully request the IRS consider the following measures to bring immediate relief to taxpayers, and reduce the backlog, during this tax filing season,” the lawmakers added. “… While we recognize no single action will alleviate issues that have resulted from difficulties at the IRS spanning administrations of both political parties, these steps would provide our constituents with greater certainty as we enter this year’s filing season.”

In addition to Sens. Menendez and Cassidy, the letter was signed by Sens. Ron Wyden, D-Ore., Jeff Merkley, D-Ore., Cory Booker, D-N.J., Michael Bennet, D-Colo., Richard Blumenthal, D-Conn., Sherrod Brown, D-Ohio, Ben Cardin, D-Md., Tom Carper, D-Del., Chris Coons, D-Del., Catherine Cortez Masto, D-Nev., Tammy Duckworth, D-Ill., Kirsten Gillibrand, D-N.Y., Tim Kaine, D-Va., Amy Klobuchar, D-Minn., Patrick Leahy, D-Vt., Cynthia Lummis, R-Wyo., Joe Manchin, D-W.Va., Chris Murphy, D-Conn., Jacky Rosen, D-Nev., Debbie Stabenow, D-Mich., Chris Van Hollen, D-Md., Mark Warner, D-Va., and Raphael Warnock, D-Ga.

Dan can be reached at [email protected] and at https://twitter.com/DanMcCue

A+
a-
  • backlogs
  • COVID-19
  • Internal Revenue Service
  • IRS
  • tax returns
  • taxpayer penalties
  • Treasury Department
  • U.S. Senate
  • In The News

    Health

    Voting

    Taxes

    House Passes Bill to Enhance Child Tax Credit, Revive Tax Breaks for Businesses

    WASHINGTON (AP) — The House accomplished something unusual Wednesday in passing with broad, bipartisan support a roughly $79 billion tax... Read More

    WASHINGTON (AP) — The House accomplished something unusual Wednesday in passing with broad, bipartisan support a roughly $79 billion tax cut package that would enhance the child tax credit for millions of lower-income families and boost three tax breaks for businesses, a combination that gives lawmakers... Read More

    December 8, 2023
    by Tom Ramstack
    Hunter Biden Indicted on Felony Charges Alleging Years of Tax Evasion

    LOS ANGELES — A Los Angeles grand jury indicted Hunter Biden on tax charges Thursday. The nine-count indictment alleges Biden... Read More

    LOS ANGELES — A Los Angeles grand jury indicted Hunter Biden on tax charges Thursday. The nine-count indictment alleges Biden failed to pay $1.4 million in taxes over four years. The Los Angeles indictment follows similar tax evasion charges this year in Delaware. Biden also is... Read More

    July 10, 2023
    by Dan McCue
    Feds Propose Change to Rules Governing Oil and Gas Decommissioning Costs

    WASHINGTON — The Biden administration is proposing changes to the federal financial assurance requirements for oil and gas companies to... Read More

    WASHINGTON — The Biden administration is proposing changes to the federal financial assurance requirements for oil and gas companies to protect taxpayers from the costs of decommissioning offshore oil wells and infrastructure no longer in use. By law, oil and gas companies must “decommission” offshore infrastructure... Read More

    June 26, 2023
    by Jacquelyn Burrer
    Supreme Court to Determine Scope of Congress’ Taxing Authority

    WASHINGTON — The Supreme Court on Monday agreed to hear a challenge to a provision of the Trump-era Tax Cuts... Read More

    WASHINGTON — The Supreme Court on Monday agreed to hear a challenge to a provision of the Trump-era Tax Cuts and Jobs Act that could dramatically alter the taxing powers of Congress. As is their custom, the justices did not explain their rationale for taking up... Read More

    June 9, 2023
    by Jacquelyn Burrer
    New Bipartisan Caucus Aims to Secure State and Local Tax Deduction

    WASHINGTON —  Members of the recently-formed bipartisan State and Local Tax Caucus are urging their colleagues to support legislation removing... Read More

    WASHINGTON —  Members of the recently-formed bipartisan State and Local Tax Caucus are urging their colleagues to support legislation removing the SALT deduction cap, arguing it will provide often neglected middle-class Americans with needed financial assistance.  The bill, the Securing Access to Lower Taxes by ensuring... Read More

    February 9, 2023
    by Dan McCue
    Bipartisan Caucus Launches Renewed Battle for Middle-Class Tax Relief

    WASHINGTON — Some familiar faces and a batch of newcomers to Capitol Hill are banding together to try to restore... Read More

    WASHINGTON — Some familiar faces and a batch of newcomers to Capitol Hill are banding together to try to restore the state and local tax deduction and bring tax relief to millions of middle-class families. A controversial part of former President Donald Trump’s 2017 tax overhaul,... Read More

    News From The Well
    scroll top