A group of lawmakers led by U.S. Sens. Bob Menendez (D-NJ) and Bill Cassidy (R-LA) is encouraging the Internal Revenue Service (IRS) to provide taxpayer penalty relief in the wake of ongoing agency processing backlogs.
Menendez and Cassidy have spearheaded the effort of 214 legislators in advocating the action via correspondence to Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig.
“While the COVID-19 pandemic has strained every federal agency, the impact on the IRS has been particularly severe,” the lawmakers wrote. “As of December 23, 2021, 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 legislators maintain the amended returns delayed processing has been devastating to small businesses whose applications for emergency loans from the Small Business Administration (SBA) have been in limbo for nearly two years since the start of the COVID-19 pandemic.
“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 lawmakers concluded. “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 measures to bring immediate relief to taxpayers and reduce the backlog during this tax filing season. 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.”