Tax Controversy During COVID-19 Didn't Have to Be This Difficult.

• Author: Simons, Tad

If there ever was a time to pity our friends at the Internal Revenue Service, that time is now.

Even before the COVID-19 pandemic hit, budget cuts and staff attrition had hampered the IRS' ability to keep up with its mounting workload, and the agency's legendarily anachronistic information technology systems were not built to handle thousands of agents working remotely from home. (The aspirational technology "modernization plan" that the IRS announced last year--a six-year $2.5 billion effort highly dependent on annual funding procurements--is barely out of the gate.) And when IRS Commissioner Charles Rettig sent almost all of the agency's 74,000 employees home in mid-March, fewer than half were both eligible for and capable of working from home--many because they lacked a laptop computer or even basic internet access.

Throw in tax-season woes and the sudden responsibility for having to send out millions of CARES Act economic relief checks to stressed Americans in a matter of weeks, and, well, you get the idea--the IRS has its hands full.

For tax practitioners, working with the IRS' skeleton crew during an unprecedented public health crisis presents a variety of challenges, not the least of which is how to proceed when controversies and disputes need to be addressed. After all, no one is picking up the phone at the IRS these days--even the Practitioner Priority Service line (1) was suspended--and paper filings and correspondence will not be processed in anything close to a timely fashion until IRS employees can safely return to their offices.

Good News: The IRS Is Relaxing

The good news is that the IRS is relaxing some of its rules and procedures in order to keep cases moving.

For example, on March 27 the Treasury announced that it would start accepting e-signatures and scanned or photographed signatures on documents related to the determination or collection of a tax liability, including power of attorney. The notice also indicated that the IRS would temporarily accept taxpayer documents via email or eFax, even though doing so with agents working from home raises myriad security issues.

Along with regular tax filings, the IRS has also suspended a number of compliance programs until July 15. Taxpayers with existing installment agreements and offers in compromise (OIC) can suspend payments until July 15, although interest will continue to accrue on unpaid balances. No new liens or levies will be issued during the suspension period...