Archive for the IRS Category

IR-2022-192, October 28, 2022 – IRS tax gap estimates

WASHINGTON — The Internal Revenue Service today released a new set of tax gap estimates on tax years 2014 through 2016 showing the estimated gross tax gap increased to $496 billion, a rise of over $58 billion from the prior estimate.

The gross tax gap is the difference between estimated ‘true’ tax liability for a given period and the amount of tax that is paid on time. As discussed below, it is important to note that the tax gap estimates cannot fully account for all types of evasion.

“These findings underscore the importance of ensuring fairness in our nation’s tax system,” said IRS Commissioner Chuck Rettig. “The increase in the tax gap estimates reflects that the IRS needs to do more, both in improving taxpayer service as well as working to improve tax compliance. The IRS remains committed to ensuring fairness and helping taxpayers while also working to better identify emerging compliance issues that contribute to the tax gap. The recent funding addition will help the IRS in many ways, increasing taxpayer education, significantly improving service to all taxpayers and focusing on high-income/high-wealth non-compliance in a fair and impartial manner supporting compliant taxpayers.”

After late payments and IRS efforts collected an additional $68 billion, the IRS estimated the net tax gap was $428 billion. This increase in the tax gap can be attributed to economic growth.

Between the two periods, 2011-2013 and 2014-2016, the estimated tax liability increased by more than 23 percent.

The tax gap estimates translate to about 85% of taxes paid voluntarily and on time, which is in line with recent levels. The new estimate is a slight improvement from 83.7 percent in a revised Tax Year 2011-2013 estimate, which dipped slightly from the original estimate released earlier. After IRS compliance efforts are taken into account, the estimated share of taxes eventually paid is 87% for 2014-2016.

The gross tax gap comprises three components:

• Nonfiling (tax not paid on time by those who do not file on time, $39 billion),
• Underreporting (tax understated on timely filed returns, $398 billion), and
• Underpayment (tax that was reported on time, but not paid on time, $59 billion).

A particular challenge for tax gap estimation is the time it takes to collect compliance data, especially data on underreporting that come from completed examinations (audits). To address this issue, the current release includes estimated tax gap projections for Tax Years 2017-2019.

Based on the projections for 2017-2019, the estimated average gross tax gap is projected to be $540 billion per year. The associated voluntary compliance rate is projected to be 85.1 percent. The projection of enforced and other late payments is $70 billion, which yields a net tax gap projection of $470 billion. The associated non-compliance rate projection is 87.0 percent.

The gross tax gap nonfiling, underreporting, and underpayment component projections for Tax Years 2017-2019 timeframe are $41 billion, $433 billion, and $66 billion respectively.

As part of the larger effort to reduce the actual tax gap, the IRS will continue to fairly enforce the tax laws. In 2021, the latest year for which data is available, the IRS currently collected more than $4 trillion in taxes, penalties, interest and user fees.

Tax gap studies through the years have consistently demonstrated that third-party reporting of income significantly raises voluntary compliance with the tax laws. And voluntary compliance rises even higher when income payments are also subject to withholding. The IRS also has an array of other taxpayer service programs aimed at supporting accurate tax filing and helping address the tax gap. These range from working with businesses and partner groups to a variety of education and outreach efforts.

The voluntary compliance rate of the U.S. tax system is vitally important for the nation. A one-percentage-point increase in voluntary compliance would bring in about $40 billion in additional tax receipts.

The tax gap estimates provide insight into the historical scale of tax compliance and to the persisting sources of low compliance.

“Keeping the voluntary compliance rate as high as possible ensures that taxpayers believe our system is fair,” Rettig said. “The vast majority of taxpayers strive to pay what they owe on time. Those who do not pay their fair share ultimately shift the tax burden to those people who do, which fuels the tax gap. The IRS will continue to direct our resources to help educate taxpayers about the tax requirements under the law while also focusing on pursuing those who avoid their legal responsibilities.”

Estimating the tax gap; offshore, digital assets, other categories not fully represented

Given the complexity of the tax system and available data, no single approach can be used for estimating each component of the tax gap. Each approach is subject to measurement or nonsampling error; the component estimates that are based on samples are also subject to sampling error. For the individual income tax underreporting tax gap, Detection Controlled Estimation is used to adjust for measurement errors that results when some existing noncompliance is not detected during an audit. Other statistical techniques are used to control for bias in estimates based on operational audit data. Because multiple methods are used to estimate different subcomponents of the tax gap, no standard errors are reported. In addition, those reviewing this data should be mindful of these limitations when using these estimates.

Given available data, these are the best possible estimates of the tax gap components presented, although they do not represent the full extent of potential non-compliance. There are several factors to keep in mind:

• The estimates cannot fully represent noncompliance in some components of the tax system including offshore activities, issues involving digital assets and cryptocurrency as well as corporate income tax, income from flow-through entities, illegal activities because data are lacking.
• The tax gap associated with illegal activities has been outside the scope of tax gap estimation because the objective of government is to eliminate those activities, which would eliminate any associated tax.
• For noncompliance associated with digital assets and other emerging issues, it takes time to develop the expertise to uncover associated noncompliance and for examinations to be completed that can be used to measure the extent of that noncompliance.

The IRS continues to actively work on new methods for estimating and projecting the tax gap to better reflect changes in taxpayer behavior as they emerge.

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Can Grandparents Claim The Child Tax Credit?

IR-2022-181, October 17, 2022

WASHINGTON – The Internal Revenue Service reminded families today that some taxpayers who claim at least one child as their dependent on their tax return may not realize they could be eligible to benefit from the Child Tax Credit (CTC).

Eligible taxpayers who received advance Child Tax Credit payments last year should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advance Child Tax Credit payments last year can claim the full credit by filing a 2021 tax return.

The IRS urges grandparents, foster parents or people caring for siblings or other relatives to check their eligibility to receive the 2021 Child Tax Credit. It’s important for people who might qualify for this credit to review the eligibility rules to make sure they still qualify. Taxpayers can use the Interactive Tax Assistant to check eligibility. Taxpayers who haven’t qualified in the past should also check because they may now be able to claim the credit. To receive it, eligible individuals must file a 2021 federal tax return.

What is the Child Tax Credit expansion?

The Child Tax Credit expansion, which is a part of the American Rescue Plan, increased the amount of money per child families can receive and expanded who can receive the payments.

The American Rescue Plan increased the Child Tax Credit from $2,000 to $3,600 per child for children under the age of six, from $2,000 to $3,000 for children over the age of 6 and raised the age limit from 16 to 17 years old.

The American Rescue Plan Act of 2021 expanded the Child Tax Credit for tax year 2021 only.

Who qualifies for the Child Tax Credit?

Taxpayers can claim the Child Tax Credit for each qualifying child who has a Social Security number that is valid for employment in the United States and issued by the Social Security Administration before the due date of their tax return (including an extension if the extension was requested by the due date).

To be a qualifying child for the 2021 tax year, the dependent generally must:

• Be under age 18 at the end of the year.
• Be their son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or a descendant of one of these (for example, a grandchild, niece, or nephew).
• Provide no more than half of their own financial support during the year.
• Have lived with the taxpayer for more than half the year.
• Be properly claimed as their dependent on their tax return.
• Not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimated tax paid.
• Have been a U.S. citizen, U.S. national or U.S. resident alien.

What are the eligibility factors?

Individuals qualify for the full amount of the 2021 Child Tax Credit for each qualifying child if they meet all eligibility factors and their annual income is not more than:

• $150,000 if they’re married and filing a joint return, or if they’re filing as a qualifying widow or widower.
• $112,500 if they’re filing as a head of household.
• $75,000 if they’re a single filer or are married and filing a separate return.

Parents and guardians with higher incomes may be eligible to claim a partial credit. Claiming these benefits can result in tax refunds for many individuals. Individuals should file electronically and choose direct deposit to avoid delays and receive their refund faster.

Finding free tax return preparation

A limited number of  Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) program sites remain open and available to help eligible taxpayers get their tax returns prepared and filed for free by IRS trained and certified volunteers. Low- and moderate-income taxpayers as well as those age 60 and above can check to see if there is an available site in or near their community by using the VITA/TCE Site Locator.

IRS Free File available until Nov. 17 to help more people receive credits

The IRS Free File program, available only through IRS.gov and offered in partnership the tax software industry’s Free File Alliance, offers eligible taxpayers brand-name tax preparation software to use at no cost. The software does all the work of finding deductions, credits and exemptions for which the taxpayer qualifies. It’s free for most individual filers who earned $73,000 or less in 2021. Some of the Free File packages also offer free state tax returns to those who qualify. Taxpayers who earned more than $73,000 in 2021 and are comfortable preparing their own taxes can use Free File Fillable Forms. This electronic version of paper IRS tax forms is also used to file tax returns online.

To help more people claim a variety of tax credits and benefits, Free File will remain open for an extra month this year, until November 17, 2022.

The IRS is sending letters to more than 9 million individuals and families who appear to qualify for a variety of key tax benefits but did not claim them by filing a 2021 federal income tax return. Many in this group may be eligible to claim some or all of the 2021 Recovery Rebate Credit, the Child Tax Credit, the Earned Income Tax Credit and other tax credits depending on their personal and family situation. The special reminder letters, which will be arriving in mailboxes over the next few weeks, are being sent to people who appear to qualify for the Child Tax Credit, Recovery Rebate Credit (RRC) or Earned Income Tax Credit (EITC) but haven’t yet filed a 2021 return to claim them. The letter, printed in both English and Spanish, provides a brief overview of each of these three credits.

These and other tax benefits were expanded under last year’s American Rescue Plan Act and other recent legislation. Even so, the only way to get the valuable benefits is to file a 2021 tax return. Often, individuals and families can get these expanded tax benefits, even if they have little or no income from a job, business or other source. This means that many people who don’t normally need to file a tax return should do so this year, even if they haven’t been required to file in recent years.

People can file a tax return even if they haven’t yet received their letter. The IRS reminds people that there’s no penalty for a refund claimed on a tax return filed after the regular April 2022 tax deadline. The fastest and easiest way to get a refund is to file an accurate return electronically and choose direct deposit.

Questions? Contact ATS Advisors Today

IR-2022-175, October 7, 2022

WASHINGTON — The Internal Revenue Service today reminds taxpayers who requested an extension to file their 2021 tax return to do so by Monday, October 17.

While October 17 is the last day for most people to file a Form 1040 to avoid the late filing penalty, those who still need to file should do so as soon as possible. If they have their information ready, there’s no need to wait.

However, some taxpayers may have additional time. They include:

• Members of the military and others serving in a combat zone. They typically have 180 days after they leave the combat zone to file returns and pay any taxes due.

• The IRS calls special attention to people hit by recent national disasters, including Hurricane Ian. Taxpayers with an IRS address of record in areas covered by Federal Emergency Management Agency disaster declarations in Missouri, Kentucky, the island of St. Croix in the U.S. Virgin Islands and members of the Tribal Nation of the Salt River Pima Maricopa Indian Community have until November 15, 2022, to file various individual and business tax returns. Taxpayers in Florida, Puerto Rico, North Carolina, South Carolina, parts of Alaska and Hinds County, Mississippi, have until February 15, 2023. This list continues to be updated regularly; potentially affected taxpayers by recent storms should visit the disaster relief page on IRS.gov for the latest information.

IRS Free File and other resources

IRS Free File is available to any person or family with an adjusted gross income (AGI) of $73,000 or less in 2021. Leading tax software providers make their online products available for free. Taxpayers can use IRS Free File to claim the Child Tax Credit, the Earned Income Tax Credit and other important credits. IRS Free File Fillable Forms is available for taxpayers whose 2021 AGI is greater than $73,000 and are comfortable preparing their own tax return—so there is a free option for everyone.

Online Account provides information to help file an accurate return, including Advance Child Tax Credit and Economic Impact Payment amounts, AGI amounts from last year’s tax return, estimated tax payment amounts and refunds applied as a credit.

Taxpayers can also get answers to many tax law questions by using the IRS’s Interactive Tax Assistant tool.

Additionally, taxpayers can view tax information in several languages by clicking on the “English” tab located on the IRS.gov home page.

Schedule federal tax payments electronically

Taxpayers can file now and schedule their federal tax payments up to the October 17 due date. They can pay online, by phone or with their mobile device and the IRS2Go app. When paying federal taxes electronically, taxpayers should remember:

• Electronic payment options are the optimal way to make a tax payment.
• They can pay when they file electronically using tax software online. If using a tax preparer, taxpayers should ask the preparer to make the tax payment through an electronic funds withdrawal from a bank account.
• Online Account and IRS Direct Pay allow taxpayers to pay online directly from a checking or savings account for free, and to schedule payments up to 365 days in advance. Taxpayers should be aware they will need to create an account to use Online Account services.
• Choices to pay with a credit card, debit card or digital wallet option are available through a payment processor. The payment processor, not the IRS, charges a fee for this service.
• The IRS2Go mobile app provides mobile-friendly payment options, including Direct Pay and debit or credit card payments.
• The Electronic Federal Tax Payment System (EFTPS) is convenient, safe and easy. Choose to pay online or by phone, using the EFTPS Voice Response System. EFTPS payments must be scheduled by 8 p.m. ET at least one calendar day before the tax due date

Oct. 17 tax extension deadline

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IR-2022-163, September 22, 2022

September 30th COVID penalty relief

WASHINGTON — The Internal Revenue Service today reminded struggling individuals and businesses, affected by the COVID-19 pandemic, that they may qualify for late-filing penalty relief if they file their 2019 and 2020 returns by September 30, 2022.

Besides providing relief to both individuals and businesses impacted by the pandemic, this step is designed to allow the IRS to focus its resources on processing backlogged tax returns and taxpayer correspondence to help return to normal operations for the 2023 filing season.

“We thought carefully about the type of penalties, the period covered and the duration before granting this penalty relief. We understand the concerns being raised by the tax community and others about the September 30 penalty relief deadline,” said IRS Commissioner Chuck Rettig. “Given planning for the upcoming tax season and ongoing work on the inventory of tax returns filed earlier this year, this penalty relief deadline of September 30 strikes a balance. It is critical to us to not only provide important relief to those affected by the pandemic, but this deadline also allows adequate time to prepare our systems and our workstreams to serve taxpayers and the tax community during the 2023 filing season.”

The relief, announced last month, applies to the failure-to-file penalty. The penalty is typically assessed at a rate of 5% per month, up to 25% of the unpaid tax, when a federal income tax return is filed late. This relief applies to forms in both the Form 1040 and 1120 series, as well as others listed in Notice 2022-36, posted on IRS.gov.

For anyone who has gotten behind on their taxes during the pandemic, this is a great opportunity to get caught up. To qualify for relief, any eligible income tax return must be filed on or before September 30, 2022.

Those who file during the first few months after the September 30 cutoff will still qualify for partial penalty relief. That’s because, for eligible returns filed after that date, the penalty starts accruing on October 1, 2022, rather than the return’s original due date. Because the penalty accrues, based on each month or part of a month that a return is late, filing sooner will limit any charges that apply.

Unlike the failure-to-file penalty, the failure-to-pay penalty and interest will still apply to unpaid tax, based on the return’s original due date. The failure-to-pay penalty is normally 0.5% (one-half-of-one percent) per month. The interest rate is currently 5% per year, compounded daily, but that rate is due to rise to 6% on October 1, 2022.

Taxpayers can limit these charges by paying promptly. For more information, including details on fast and convenient electronic payment options, visit IRS.gov/payments. Penalty and interest charges generally don’t apply to refunds.

The notice also provides details on relief for filers of certain international information returns when a penalty is assessed at the time of filing. No relief is available for applicable international information returns when the penalty is part of an examination. To qualify for this relief, any eligible tax return must be filed on or before September 30, 2022.

Penalty relief is automatic. This means that eligible taxpayers who have already filed their return do not need to apply for it, and those filing now do not need to attach a statement or other documents to their return. Generally, those who have already paid the penalty are getting refunds, most by the end of September.

Penalty relief is not available in some situations, such as where a fraudulent return was filed, where the penalties are part of an accepted offer in compromise or a closing agreement, or where the penalties were finally determined by a court.

This relief is limited to the penalties that the notice specifically states are eligible for relief. For ineligible penalties, such as the failure-to-pay penalty, taxpayers may use existing penalty relief procedures, such as applying for relief under the reasonable cause criteria or the First-Time Abate program. Visit IRS.gov/penaltyrelief for details.

This relief doesn’t apply to 2021 returns. Whether or not they have a tax-filing extension, the IRS urges everyone to file their 2021 return soon to avoid processing delays. For filing tips, visit IRS.gov.

Any questions on the September 30th COVID penalty relief? Contact ATS Today

IR-2022-157, September 6, 2022

WASHINGTON — The Internal Revenue Service reminds taxpayers who pay estimated taxes that the deadline to submit Estimated Tax Payments for 3rd Quarter is September 15, 2022.

Taxpayers not subject to withholding, such as those who are self-employed, investors or retirees, may need to make quarterly estimated tax payments. Taxpayers with other income not subject to withholding, including interest, dividends, capital gains, alimony, cryptocurrency and rental income, also normally make estimated tax payments.

In most cases, taxpayers should make estimated tax payments if they expect:

• To owe at least $1,000 in taxes for 2022 after subtracting their withholding and tax credits.
• Their withholding and tax credits to be less than the smaller of:
  • 90% of the tax to be shown on their 2022 tax return or
  • 100% of the tax shown on their 2021 tax return. Their 2021 tax return must cover all 12 months.

Special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year. Publication 505, Tax Withholding and Estimated Tax, provides more information on estimated tax rules. The worksheet in Form 1040-ES, Estimated Tax for Individuals, or Form 1120-W, Estimated Tax for Corporations, has details on who must pay estimated tax.

How to figure estimated tax

To figure estimated tax, individuals must figure their expected Adjusted Gross Income (AGI), taxable income, taxes, deductions and credits for the year.

When figuring 2022 estimated tax, it may be helpful to use income, deductions and credits for 2021 as a starting point. Use the 2021 federal tax return as a guide. Taxpayers can use Form 1040-ES to figure their estimated tax.

The Tax Withholding Estimator on IRS.gov offers taxpayers a clear, step-by-step method to have their employers withhold the right amount of tax from their paycheck. It also has instructions to file a new Form W-4 to give to their employer to adjust the amount withheld each payday.

How to avoid an underpayment penalty

Taxpayers who underpaid their taxes may have to pay a penalty. This applies whether they paid through withholding or through estimated tax payments. A penalty may also apply for late estimated tax payments even if someone is due a refund when they file their tax return.

To see if they owe a penalty, taxpayers should use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. Taxpayers can also see the Form 2210 instructions under the “Waiver of Penalty” section. The IRS may waive the penalty if someone underpaid because of unusual circumstances and not willful neglect. Examples include:

• Casualty, disaster or another unusual situation.
• An individual retired after reaching age 62 during a tax year when estimated tax payments applied.
• An individual became disabled during a tax year when estimated tax payments applied.
• Specific written advice from an IRS agent given in response to a specific written request. The taxpayer must provide copies of both.

The fourth and final 2022 estimated tax payment is due January 17, 2023.

Other IRS.gov resources

• Pay Online provides complete tax payment information, how and when to pay, payment options and more.
• Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts
• Form 2220, Underpayment of Estimated Tax by Corporations

Contact ATS today with any questions about Estimated Tax Payments for 3rd Quarter !

WASHINGTON — As the new school year begins, the Internal Revenue Service reminds teachers and other educators that they’ll be able to use the Educator Expense Deduction to deduct up to $300 of out-of-pocket classroom expenses for 2022 when they file their federal income tax return next year.

This is the first time the annual limit has increased since the special educator expense deduction was enacted in 2002. For tax years 2002 through 2021, the limit was $250 per year. The limit will rise in $50 increments in future years based on inflation adjustments.

For 2022, an eligible educator can deduct up to $300 of qualifying expenses. If they’re married and file a joint return with another eligible educator, the limit rises to $600. But in this situation, not more than $300 for each spouse.

Who qualifies?

Educators can claim this deduction, even if they take the standard deduction. Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal or aide in a school for at least 900 hours during the school year. Both public and private school educators qualify.

What’s deductible?

Educators can deduct the unreimbursed cost of:

• Books, supplies and other materials used in the classroom.
• Equipment, including computer equipment, software and services.
• COVID-19 protective items to stop the spread of the disease in the classroom. This includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the Centers for Disease Control and Prevention.
• Professional development courses related to the curriculum they teach or the students they teach. But the IRS cautions that, for these expenses, it may be more beneficial to claim another educational tax benefit, especially the lifetime learning credit. For details, see Publication 970, Tax Benefits for Education, particularly Chapter 3.

Qualified expenses don’t include the cost of home schooling or for nonathletic supplies for courses in health or physical education. As with all deductions and credits, the IRS reminds educators to keep good records, including receipts, cancelled checks and other documentation.

Reminder for 2021 tax returns being filed now: Deduction limit is $250

For those who received a tax filing extension or still need to file a 2021 tax return, the IRS reminds any educator still working on their 2021 return that the deduction limit is $250. If they are married and file a joint return with another eligible educator, the limit rises to $500. But in this situation, not more than $250 for each spouse.

File electronically when ready. Tax-filing software uses a question-and-answer format that makes doing taxes easier. Whether a return is self-prepared or prepared with the assistance of a tax professional or trained community volunteer, the IRS urges everyone to file electronically and choose direct deposit for refunds. For details, visit Electronic Filing Options for Individuals.

In addition, the IRS urges anyone who owes taxes to choose the speed and convenience of paying electronically, such as with IRS Direct Pay, a free service available only on IRS.gov. For information about this and other payment options, visit Pay Online.

Taxpayers who requested more time to file an accurate return have until October 17, 2022. Those who have what they need to file, however, should file as soon as possible to avoid delays in processing their return. Taxpayers are urged to file electronically when they are ready and avoid the last-minute rush to file at the deadline.

Contact ATS today, with any tax related questions!

IRS Tax Tip 2022-107, July 14, 2022

There are many ways people plan for retirement. Individual Retirement Arrangements, or IRAs, are a common one. Listed below are the 5 Different Types of IRA’s. IRAs provide tax incentives for people to make investments that can provide financial security when they retire. These accounts can be with a bank or other financial institution, a life insurance company, mutual fund, or stockbroker.

Here are some things to know about a traditional IRA.

• A traditional IRA is a tax-advantaged personal savings plan where contributions may be tax deductible.
• Generally, the money in a traditional IRA isn’t taxed until it’s withdrawn.
• There are annual limits to contributions depending on the person’s age and the type of IRA.
• When planning when to withdraw money from an IRA, taxpayers should know that:
  • They may face a 10% penalty and a tax bill if they withdraw money before age 59½, unless they qualify for an exception.
  • Usually, they must start taking withdrawals from their IRA when they reach age 72. For tax years 2019 and earlier, that age was 70½.
  • Special distribution rules apply for IRA beneficiaries.

Roth IRAs are like traditional IRAs, but there are some important differences.

A Roth IRA is another tax-advantaged personal savings plan with many of the same rules as a traditional IRA but there are exceptions:

• A taxpayer can’t deduct contributions to a Roth IRA.
• Qualified distributions are tax-free.
• Roth IRAs don’t require withdrawals until after the death of the owner.

Here are a few other types of IRAs:

• Savings Incentive Match Plan for Employees. A SIMPLE IRA allows employees and employers to contribute to traditional IRAs set up for employees. It is suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
• Simplified Employee Pension. A SEP IRA is set up by an employer. The employer makes contributions directly to an IRA set up for each employee.
• Rollover IRA. This is when the IRA owner receives a payment from their retirement plan and deposits it into a different IRA within 60 days.

More information:

• Publication 590-A, Contributions to Individual Retirement Arrangements
• Publication 590-B, Distributions from Individual Retirement Arrangements
• Topic No. 557, Additional Tax on Early Distributions from Traditional and Roth IRAs
• Topic No. 413, Rollovers from Retirement Plans
• Topic No. 451, Individual Retirement Arrangements

Contact ATS Advisors with any questions today about the 5 Different Types of IRA’s

Assistance for eligible taxpayers in setting up or modifying payment plans now available; more functions planned in 2022 to help taxpayers obtain account information

Voice Bot Video

IR-2022-127, June 17, 2022

WASHINGTON – The Internal Revenue Service today announced expanded voice bot options to help eligible taxpayers easily verify their identity to set up or modify a payment plan while avoiding long wait times.

“This is part of a wider effort at the IRS to help improve the experience of taxpayers,” said IRS Commissioner Chuck Rettig. “We continue to look for ways to better assist taxpayers, and that includes helping people avoid waiting on hold or having to make a second phone call to get what they need. The expanded voice bots are another example of how technology can help the IRS provide better service to taxpayers.”

Voice bots run on software powered by artificial intelligence, which enables a caller to navigate an interactive voice response. The IRS has been using voice bots on numerous toll-free lines since January, enabling taxpayers with simple payment or notice questions to get what they need quickly and avoid waiting. Taxpayers can always speak with an English- or Spanish-speaking IRS telephone representative if needed.

Eligible taxpayers who call the Automated Collection System (ACS) and Accounts Management toll-free lines and want to discuss payment plan options can authenticate or verify their identities through a personal identification number (PIN) creation process. Setting up a PIN is easy: Taxpayers will need their most recent IRS bill and some basic personal information to complete the process.

“To date, the voice bots have answered over 3 million calls. As we add more functions for taxpayers to resolve their issues, I anticipate many more taxpayers getting the service they need quickly and easily,” said Darren Guillot, IRS Deputy Commissioner of Small Business/Self Employed Collection & Operations Support.

Additional voice bot service enhancements are planned in 2022 that will allow authenticated individuals (taxpayers with established or newly created PINs) to get:

• Account and return transcripts.
• Payment history.
• Current balance owed.

In addition to the payment lines, voice bots help people who call the Economic Impact Payment (EIP) toll-free line with general procedural responses to frequently asked questions. The IRS also added voice bots for the Advance Child Tax Credit toll-free line in February to provide similar assistance to callers who need help reconciling the credits on their 2021 tax return.

The IRS also reminds taxpayers about numerous other available self-service options.

Contact ATS Advisors today with any questions!