In this issue:
- Fiscal Year 2020 Data Finally Released… Data Time!
- IRM Update on Interest Calculations on Manually Prepared Returns in BK Cases
- Are you doing the right work?
Fiscal Year 2020 Data Book
Last week, the IRS finally released the FY20 Data Book. This is my most favorite IRS statistical release of the year, as it includes all the juicy Collections activity details for the year.
As was expected, the shutdown of Collection activity from April 1, 2020 through September 30, 2020 resulted in significant changes to Collection and Examination activities at the Service. The number I was most looking forward to seeing was the change in NFTL filings. All last year, I was guesstimating that we’d see around 250,000 NFTL filings for fiscal year. I wasn’t actually that far off, but the Service beat my prediction with 291,000 NFTs filed.
Other interesting tidbits:
- Case inventory dropped like a rock, as expected, with only 8.4 million Collection cases in inventory by the end of the fiscal year. This is getting balanced out by the massive increase in enforcement action going on right now, though, so don’t assume that tax resolution is dead — far from it!
- Levy action dropped by almost half compared to 2019.
- Delinquent return investigations increased by over 26% — this clearly shows the importance of this activity to the Service (in case you didn’t know it already).
- OIC acceptance dropped to 31%, with only 0.19% of all Collections cases being resolved via OIC. Not 19%… 0.19%. This is something I continuously stress to tax pros.
From the Exam side, Dan shares:
- Examinations were cut almost in half compared to three years ago.
- 80% of audits are still being conducted by correspondence.
- 90% of all Examinations are against individuals — despite more than half of Collection cases being against businesses. Quite the imbalance in The Force.
Interest Calculations on Manual Returns
IRS released an update to internal procedures on June 14, 2021 under IRM 5.9.13 pertaining to Service preparation of tax returns while a taxpayer is in bankruptcy.
Letter 1714 is a notice sent to the taxpayer that requests unfiled returns. This IRM procedure dictates the procedures for IRS employees to follow when following up on this request for returns and return information. This can include updating taxpayer records with explanations about why filing wasn’t required, reaching out to the taxpayer or their bankruptcy attorney by phone in an … Continue reading