Congress Tax Relief Plans: What to Expect

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Congress And the IRS Continue to Battle Over Tax Relief: What This Means For You

The ongoing backlog at the IRS has caused its fair share of headaches for taxpayers. Struggles to secure penalty abatements are common, as are issues prompted by automated collections.

The IRS seems slow to move on these problems, so Congress is beginning to put on pressure. Will this make a difference? Keep reading to find out.

Top Demands from Congress

Nearly 200 members of the House recently sent a bipartisan letter to the IRS in hopes of obtaining relief. A Senate coalition followed suit. Common proposals include:

  • Halt automated collections as soon as possible. Congress members hope this reprieve will last until several months after taxes are due on April 18th, 2022.
  • Offer penalty relief to taxpayers who covered the majority of their IRS obligations in 2020 and 2021.
  • Delay collections until penalty abatements can be requested.
  • Create a streamlined penalty abatement process for taxpayers affected by COVID.

The Response from the IRS

Congressional demands may provide a small source of hope for struggling taxpayers, but the requests highlighted above may not be carried out for some time. Responses from both the agency and the Professional Managers Association (PMA) call for additional clarification from Congress, especially with respect to reasonable cause abatements and the halting of automatic collections.

The PMA adds that it’s fully within Congressional power to pass legislation that provides penalty relief for taxpayers. Meanwhile, the IRS has criticized Congress for limiting its ability to deal with increased tax demands. As these two powers continue to face off, taxpayers can expect additional struggles in the future.

As you await action from Congress or the IRS, it’s important to address your tax situation proactively. After all, there’s no guarantee that either body will provide the relief you desire. Our team at the Highland Tax Group can provide additional peace of mind during this difficult time. Contact us today to learn more.