Legislative Changes Needed For IRS Handling Of Disaster Declarations-NTA

Action is needed at the legislative level to address issues the Internal Revenue Service has with disaster relief, National Taxpayer Advocate Erin Collins said.

In a pair of recent blog posts, Collins highlighted that taxpayers in recently declared disaster areas have been receiving “notice and demand” collection letters from the agency, contrary to other public information about when payments are due and when interest on and penalties will accrue.

“Disaster area taxpayers can ignore the CP14 collection notice when the original due dates fall within the postponement period,” Collins wrote in part one of the blog. “The payment due date on the collection notice is wrong. The correct payment due date is stated on the disaster declaration. Taxpayers can verify the correct payment date by checking irs.gov.”

Collins stated that the collections notices are being automatically generated based on normal conditions and do not necessarily account for disaster declarations. In the blog she recommended that “IRS reprogram its systems to delay the issuance of the notice, including Notice CP14, pro provide the correct due date on page one of the notice” when deadlines for payment are affected by disaster declarations.

She also encouraged those who receive notices to read all pages and inserts and not just the due date on page one of the notice, as correct dates may be found on subsequent pages or inserts of the mailing.

Collins also called for legislative changes to help address this issue.

In part two of the blog post, Collins wrote that, “I strongly recommend that Congress amend Code Sec. 7508A and treat a disaster relief postponement in the same manner as prescribing tax-related deadlines for all purposed of the Code. We need to resolve this issue across the board rather than one disaster at a time.”

If Congress doesn’t make that change, it “should consider amending Code Sec. 6303(b) to provide that when the Secretary postpones a filing deadline pursuant to Code Sec. 7508A, the deadline for issuing a notice and demand includes any periods of postponement,” she added.

By Gregory Twachtman, Washington News Editor