Under Pressure From Congress IRS Offers Taxpayers Limited Relief, Advocacy Coalition Pushes Back

On Wednesday, January 26, 2022, a bi-partisan group of nearly 200 members of the U.S. House sent a letter to Treasury Secretary Janet Yellen requesting relief for taxpayers in light of “unprecedented challenges” being faced by the Internal Revenue Service. The letter highlights the problems faced by small businesses who have followed IRS and Small Business Administration procedures for requesting pandemic-related relief funds noting that “the IRS has 2 million Forms 941 (Employer Quarterly Tax Returns) that must be processed before the nearly 500,000 amended Forms 941 can be processed. In many cases, the delayed processing of amended returns has been devastating to small businesses in our communities whose applications for emergency loans from the Small Business Administration have been caught in limbo nearly two years after the COVID-19 pandemic began.”

In many cases amended Forms 941 have been filed as part of the procedure for obtaining the Employee Retention Credit (ERC), which was part of the pandemic relief included in the CARES Act passed in March 2020. The ERC was meant as a measure to improve cash flow for businesses struggling due to the effects of the pandemic. Needless to say, a six month wait under such circumstances is too long. Two years is unconscionable.

The Congressional letter follows a similar letter sent to the Treasury Department and the IRS by the Tax Professionals United for Taxpayer Relief coalition on January 14th. The Congressional letter also requests specific measures designed to “bring immediate relief to taxpayers, and reduce the backlog, during this filing season: