On Jan. 30, the Government Accountability Office (GAO) released its findings regarding the IRS's readiness for the 2025 tax season. The GAO report reviewed IRS customer response times both by phone and by mail in addition to reviewing 2024 tax return processing times. Although the IRS has recently modernized its systems using funds received from the Inflation Reduction Act (IRA), the GAO found the agency has not improved its speed for processing mail despite new sorting and scanning machines. While the IRS has hired more staff to assist in return processing and customer service, the GAO found the IRS has not done enough to significantly address the delays. The IRS has processed 98% of the 174 million individual and business returns filed by April 2024. However, the general processing time for a paper-filed return was 20 days, a week longer than the IRS's goal of 13 days. Even with the ability to file more business forms electronically, the IRS has not been able to reduce the wait time for those returns that must be mailed in or that require additional correspondence. The IRS website now allows an individual or business taxpayer to see when their mail or documents were received, which is a great improvement from previous years. Unfortunately, there is no information on when they can expect an IRS response. The GAO recommends that the IRS determine what is causing its processing shortfall and correspondence backlog of nearly 6.9 million as of November 2024. These recommendations are in line with the six key improvements the GAO identified when reviewing the IRS' efficiency in June of 2022. Those six items were as follows: -Improving taxpayer services -Reducing tax fraud and improper payments -Improving cybersecurity -Enhancing information reporting -Improving audit effectiveness -Enhancing strategic human capital management

As the tax season gets into full swing, concerns are mounting over potential staffing cuts and other changes at the IRS impacting service levels for tax professionals and taxpayers alike. While employees who are critical for the 2025 filing season are not projected to be part of the recently announced federal employee buyout, tax professionals are strongly encouraged to advise their clients to establish IRS online accounts to help streamline interactions with the agency and avoid delays. The IRS online account platform allows taxpayers to access a range of critical services, including: Viewing tax balances and payment history Accessing transcripts for prior years' tax returns Receiving notifications of any tax-related issues Setting up payment plans or managing direct deposits for refunds Benefits of Online Accounts For taxpayers, an online account provides a convenient, self-service option to manage tax obligations without relying on long wait times for IRS phone or in-person support. Tax professionals also benefit by having clients who can access key documents and information quickly, allowing for more efficient tax preparation and issue resolution. "With staffing constraints at the IRS, delays in correspondence and support are inevitable," said Scott Artman, Chief Executive Officer of NATP. "Encouraging taxpayers to establish online accounts now can significantly mitigate these delays and ensure a smoother tax filing process." How Tax Professionals Can Help Tax professionals are critical in educating clients about the benefits of IRS online accounts and guiding them through the setup process. Steps for clients include: Visiting the official IRS website at www.irs.gov/account Creating an ID.me account or verifying their identity through an existing login Securing their account with two-factor authentication for added protection Taxpayers should be reminded to use secure internet connections and avoid public Wi-Fi when accessing sensitive financial information, ensuring they feel secure and protected. Preparation Is Key With the IRS's potentially limited resources, preparation is key for both tax professionals and their clients. By acting now, taxpayers can take control of their tax matters, reduce the risk of service disruptions, and ensure timely compliance with filing requirements, providing a sense of relief and reducing stress. For more information on establishing an IRS online account, visit https://www.irs.gov/payments/online-account-for-individuals.

While a recent federal court ruling has temporarily blocked the Trump administration's buyout offer, the IRS Human Capital Office has informed the agency's staff that employees in positions critical for the 2025 filing season could not accept the offer until May 15. A letter sent to IRS employees Wednesday specified that critical filing positions in Taxpayer Services, Information technology and the Taxpayer Advocate Service are exempt from the buyout offer until after tax season. The agency is attributing the decision to exempt the filing season employees to Treasury Secretary Scott Bessent. The letter was sent one day before the deadline for accepting the Office of Personnel Management's (OPM's) “deferred resignation” program allowing federal employees to resign while receiving full pay and benefits through September. The offer excludes employees in the military, postal service, immigration enforcement, national security and other specified roles. The IRS's decision to exempt certain employees from the buyout aligns with the department's operational needs during the 2025 filing season. A Massachusetts federal judge issued an order postponing the deadline for federal employees to accept the buyout offer until he can hold a hearing Monday afternoon. The order came after three federal unions asked for a temporary restraining order suspending today's deadline for federal employees to accept the offer.

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