While some may think the AICPA’s only purpose is blocking attempts to change CPA licensure rules for the better and distributing discount insurance offers to its members, there’s another important side to their work: advocacy. This often comes in the form of memos, interviews, or strongly worded letters addressed to whomever is in need of a little slapping around. Sometimes it’s even funny stuff the AICPA has to take time out of their busy day to address, for example this:
Today we’re going to look at a less funny letter the AICPA sent to Treasury Secretary Janet Yellen (or “Janette L. Yellen” per the letter) and IRS Commissioner Daniel “Danny” Werfel “RE: The Impact on Taxpayers and Tax Practitioners of an Internal Revenue Service
Shutdown during the 2024 Tax Filing Season.” The full letter is below.
TLDR The AICPA is deeply concerned that a 2024 government shutdown would have catastrophic effects on the IRS, taxpayers, and taxpayers’ practitioners and outlines just a few of the issues basically guaranteed to happen should there be a shutdown. The letter notes that some of these are already problems due to the backlog and will only get worse if a shutdown does as the name describes and grinds most of the IRS to a halt.
As noted in the National Taxpayer Advocates September 29 blog, the IRS’s Contingency Plan takes
a narrow interpretation of the Office of Management and Budget guidance to encompass only the
government’s safety of human life and protection of property and not the safety and property of U.S.
citizens and taxpayers. This interpretation results in many important tax administration functions
stopping in the event of a shutdown. Specifically:
- Taxpayer phone calls should be answered, but with two-thirds of the IRS furloughed access
to information to resolve taxpayer issues will be limited.
- All Taxpayer Assistance Centers will close, which will result in a loss of face to face service
to thousands of taxpayers per day.
- Refunds will not be processed except in cases where e-filed, error free refunds can be automatically direct deposited; thus, no refunds to approximately one-third of taxpayers that depend on their refunds for daily living.
- The IRS will not respond to paper correspondence, as well as certain paper filings, which will
create a paper backlog.
- Automated notices will continue, which include notices of intent to levy and automatic
transfers to collections.
According to our members, though there have been recent improvements to IRS services, processes are still not functioning at pre-pandemic levels. Adding an IRS shutdown will create more problematic issues, burdens, and backlogs, similar to those created by the pandemic. Past experience has taught us that an IRS shutdown, especially between now and April 15, 2024, will have dire consequences to the IRS, taxpayers, and their practitioners. The longer the shutdown, the larger the backlog and other challenges become. When the IRS re-opens, the IRS will need to work through the backlog while at the same time processing incoming paper and electronic submissions and answering an increased number of taxpayer calls to resolve outstanding issues.
Never one to only complain and not offer solutions to go with the complaining, the AICPA offers a few recommendations to address these potential issues:
- Update the Current Contingency Plan to Include the IRA Funding to Provide Full Assistance to Taxpayers and Tax Practitioners
- Provide Automatic Extension of Notices and Collections Until 90 Days from the Shutdown Ending Date, Stop Assessing Penalties and Interest, and Cease Sending Automated Notices
- Maintain All Online Systems and Accounts to Ensure They Operate Effectively
- Retain More IRS Chief Counsel Attorneys for Guidance
You can see full recommendations here. See? The AICPA does have your back!