Tax Pros Seeing Surprise Bills Due To IRS Processing Delays

Tax attorneys Abbey Garber and Lee Meyercord spoke with Law360 about the increase in the number of tax professionals seeing surprise bills due to IRS processing delays. Tax practitioners who filed amended returns, late filings and payments by mail for clients say they are encountering delays in the documents' processing by the Internal Revenue Service, resulting in automatic — and startling — notices of deficiency. Mr. Garber and Ms. Meyercord said they had clients facing problems due to processing delays. The issues for Mr. Garber's clients predate the pandemic while Ms. Meyercord's problems arose during it, they said.

Ms. Meyercord said she had a client with significant carryback losses that generated a refund, and the client filed amended returns for two different years. One was sent in early October and another in early November. At the end of November, the November amended return was received and assigned to a revenue agent for review, but as of late January the IRS still had no record of the October filing, she said. "If you're all caught up, then why hasn't my client received the refund?" she said. "Or why hasn't it shown up in the system as received? I understand a refund can take three to four months to be received but we haven't even received notification that they received the amended return."

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