About a year ago we noticed a massive influx of IRS Letters coming in from our clients that made no sense whatsoever. We assumed that sooner or later, the problem would correct itself.
Instead of getting better, it’s become worse.
As part of the increased funding the IRS received from the Inflation Reduction Act, they beefed up their Artificial Intelligence Systems. These systems are now automatically generating IRS Letters that are ridiculous in the extreme.
Examples of these letters include…
1 – “Our records show we received your Form 1120 on (whatever date) for the tax period listed above. We’re sorry but we can’t find (it)…Please send us a newly signed copy…”
If they know that they received a form, where did it go?
2 – “We received your form for the tax periods above and we need more information…Send (the) requested information within 30 days…”
This one asks for additional information on a Regular or C Corp Return. All of the companies I’ve received this letter on, are S Corps. No C Corp return was ever generated or filed in the first place.
Please understand that the first rule in dealing with the IRS is that we must always respond to the letters they send. They’re named “30 Day Letters” because that’s how long we have to respond.
If we don’t respond inside that period, the IRS will make assumptions and the problem may get worse.
Let me leave you with this…
One of the issues we have is that whenever a client gets a letter from the IRS, they usually assume that their accountant made a mistake. In their mind, they’ll say something like, “Why would the IRS go to the trouble of sending out a letter if everything was alright?”
This can be true. If an accountant makes a mistake, then the IRS will send a letter trying to fix the problem. But I think you’ll agree with me, that since their AI Systems have taken over, most of what we’re dealing with is a complete waste of valuable time.
Many clients might also make the mistake of thinking that calling the Service will fix the problem. Please understand that when you call, if you actually get someone on the phone, that the agents you speak to are the least experienced people working at the IRS.
They put these new workers answering the phones after a full two weeks of training. In other words, the agents generally don’t know much, and can only tell you what the computer tells them.
If someone did call after receiving the letter in the second example and told the agent, “I never sent in a C Corp Return,” what could an that new worker actually do? They might put a note on the computer file, but is that going to solve the problem?
The computer still thinks you sent in a return that doesn’t exist and you’d continue getting AI generated letters.
Mailing in a letter that may get to the right department is the only choice. If it doesn’t get to the right place and we receive a rejection letter, at that point we could turn the matter over to the Taxpayer Advocate’s Office for a resolution.
And then it would get fixed, but it all begins by writing a letter. Believe it or not, sometimes the old ways are the only reasonable ones.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.SalarySolutions.net
www.AccountingSolutionsLtd.com
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