Taxes and the IRS in 2022

This year, it’s more important than ever to have some patience as you’re getting ready to prepare your tax return. In this video, I’ve got some key tips to make sure that you have a smooth process so you get your refund as quick as humanly possible.

At the beginning of the pandemic, the IRS pushed the tax deadline back to the middle of June. Last year it was the middle of May. This year, the new tax deadline should be fairly normal in mid-April.

And they’re telling us we’re returning to some sort of normalcy. Well, unfortunately this tax season could be even more difficult than the last two for most tax filers.

Hi, my name is Josh Bretl, I am a retirement specialist and a CPA.

And a lot of our clients get really fearful when they get a love letter from the IRS, or if they get some sort of correspondence from the IRS, no one looks forward to that. Now every IRS person I’ve talked to, every IRS person I’ve met, is a really nice human being.

They aren’t trying to hurt you, they’re just trying to do their job. And if you can make their job easier, they’ll try and take care of you at the same time.

Now unfortunately, the IRS has a terrible reputation. That’s not their employee’s fault as I’d argue it’s the government’s fault. But this year is going to be even harder for you to like them.

Now let’s start with what they’re digging out of right now. As of December 18th, they still had 6.3 million of the 2020 tax returns to go through.

They had 2.3 million amended returns to go through from 2020. They haven’t even looked at that yet.

What they’ve said though, is that as of that date, December 18th, so almost one month ago from when you’re seeing this video, they have been able to process every tax return that has come into their office before April of last year.

Now, what does that mean? That means there’s a lot of you out there that still haven’t heard about what’s going on with your tax return from 2020. And we are now getting into the 2021 tax filing season.

The main IRS office is in Kansas city, Missouri. Now, right outside this main IRS office, in early December, they had eight semi-truck loads full of mail that they have not opened yet.

Imagine being an IRS employee who your job is to respond to people, and you look out as you come in every morning, you have eight semi-truck loads full of mail that they need to respond to.

I’m not trying to tell you to sympathize with the IRS, but they are in deep over their heads.

Now, what happens is if you ever get a letter from the IRS, quite often, no human being has ever seen your return. Some computer has matched something up and they’ve said, “Hey, this person needs to get a letter. We don’t agree with this.”

And they give you so much time to reply to it. If you don’t reply to it in time, they send you a meaner letter.

And if you don’t reply to that letter in time, then they send you what is called an intent to levy. And that’s where they can actually take money from you.

The problem we’re seeing here is those truckloads of mail that you’re seeing out there, those are the replies. Those are the things that they haven’t read yet.

So the computers are automating sending these second, third, and fourth notices when you’ve replied to the first…and they don’t know it yet.

We have a client right now that got a letter from the IRS which they agree with. They paid them a check. Nine months later, the IRS still hasn’t acknowledged that they’ve received the check.

So the check has cleared the client’s bank account. Everything is out, but the IRS still says, “Hey, you owe us money.”

This is extremely frustrating. They are working this out. They say they’re coming to a good resolution here to this in the future. But, this year, it’s going to be more important than ever that your return is accurate.

A few things that you need to know right now is last year, there was a stimulus paid in February or March. Now you have the right on your tax return, if you didn’t get that stimulus, or if you didn’t get enough of that stimulus, you get to make up that difference in your 2021 tax return.

Well, you’re going to get a letter from the IRS, you should get it in late January of 2022. And that letter is going to tell you how much they have on their records that you’ve received.

The same is true if you’re getting child tax credits. If they’ve prepaid you child tax credits, make sure you have this letter when you do your return.

Because if you put down the wrong number, that is going to instantly kick you into the part of their system that you don’t want to be in – The system that’s going to generate those letters and is going to take longer and longer for you to get your refund.

The other thing you want to make sure you look at this year is, you want to file electronically.

I know most of you are already filing electronically, but some of you have been doing paper filing because you don’t trust the IRS, or whatever it might be.

But let me tell you what happens if you file paper. If you send a paper return in, the IRS opens it, and they have a very low paid person, taking your information and typing it into the computer.

So you can either type it in the computer yourself and send it to them electronically, or you can send them paper and you can have somebody else type it in there for you.

Errors happen that way. Time takes forever, if you do it that way. This year now more than ever, it is super important that you file electronically, if you are able to.

The last thing you want to be aware of, is you may not want to file too early this year because Congress is still looking at tax changes that might retroactively impact the 2021 tax return.

 The farther we get away from December 31st, the more unlikely this is to happen. But this did happen last year in March where they made a big change and it had a big impact on a lot of people.

So be aware of what happens if Congress does make a change. So this year, do know the IRS is proactive, they’re trying to look out for you, but also understand that this tax season is going to be unlike any other where you are going to have to make sure you are doing things accurately.

The AICPA is the American Institute of Certified Public Accountants. They are the general governing body of all CPAs. And behind the scenes for the last year or so, they’ve been trying to encourage the IRS.

“Don’t send as much correspondence. Don’t have as many enforcement activities because you can’t keep up with the responses!”

They’ve been doing that behind the scenes, well now – They’ve stopped. Now they’re actually formalizing that, they’ve put it out to the public, they’ve said to the IRS, ” You guys need to take a break until you can get your act together to send these notices out.”

We haven’t heard yet if the IRS is going to accept that. But as of now, if you get a notice, make sure you have some patience.

More importantly, I would tell you let’s do everything in your power not to get a notice. So let’s recap what those are:

1. That letter that you’re going to get from the IRS in late January that talks about how much stimulus you received, and how much child tax credit, if you are eligible for child tax credits, make sure you have that when you do your return.

2. File electronically as much as humanly possible.

3. And you may want to wait a little bit to make sure Congress isn’t going to change any tax laws so that your return is done with as much accuracy as humanly possible.

And all else being said, this year, let’s have some patience for those that are doing your return, as well as let’s, I never want to say this too loud, but let’s try and make the IRS’s job as easy as possible so that you can get your refund and everything that’s due to you without much hassle.

I hope you got something out of this video. If you want to know how it applies more to your personal situation, please feel free to book a 15 minute phone call with my team.