Significant IRS news from Washington D.C. came last week. TIGTA audit indicates IRS needs to better administer the partial payment installment agreement (PPIA) program. Witnesses implored Congress to reinstate charitable contribution deduction for taxpayers who do not itemize.
IRS News from Washington D.C. 2022
For the week of March 21, the two big news items out of D.C. were the IRS’s failures surrounding the PPIA program and the need to reinstate the charitable contribution deduction for non-itemizers.
The experienced IRS tax attorney at Columbus, Ohio based Porter Law Office, LLC helps individuals and businesses across the U.S. resolve tax controversies. If you have any questions about your taxes, contact our office today.
Partial Payment Installment Agreements
TIGTA, or the Treasury Inspector General for Tax Administration, indicated last week in an audit report that the IRS needs to significantly improve their administration of the PPIA program. PPIAs date back to 2004 when they were created under the American Jobs Creation Act.
A PPIA allows taxpayers to make monthly payments to the IRS, typically in very low amounts. These payments are not enough to satisfy the entire tax liability. But once the terms of the PPIA are fulfilled, the IRS cannot collect on the remainder of the tax debt as the CSED will have expired.
At the two-year mark, taxpayers are required to submit updated financial information so the IRS can review changes to the monthly payment amount.
TIGTA found several areas of concern with IRS’s administration of the program:
- The IRS “has not provided taxpayers with adequate information on PPIAs on its public website or with the instructions pertaining to the form used to request an installment agreement, nor has the IRS created an effective means for taxpayers to request PPIAs or appeal rejected PPIAs as required by law.”
- From FY2016 to FY2020, PPIAs accounted for less than 2 percent of new installment agreements. TIGIA attributes this low rate to the IRS’s lack of publicity or outreach efforts aimed at increasing awareness of PPIAs.
- TIGTA also found that the IRS is establishing PPIAs for amounts that taxpayers cannot afford. The default rate of PPIAs is higher than all other types of installment agreements.
PPIAs are an excellent alternative to currently not collectible status and can help increase revenue for the treasury. The IRS is missing debt collection opportunities by failing to properly administer this program. After this report was issued, the IRS promised to update its website with better information regarding the PPIA program. We hope they follow through.
Charitable Contribution Deduction
You may have noticed that you were able to deduct up to $600 in charitable contributions in 2021, even if you did not itemize your deductions on Schedule A.
This favorable charitable donation tax deduction, however, has expired. Witnesses told members of Congress last week that this deduction should be reinstated. It has significantly helped charities and non-profit organizations weather the COVID storm. It is a no-brainer to reinstate this deduction for 2022.
Other IRS News
Refunds. The IRS informed taxpayers that the agency issues most refunds in less than 21 days for taxpayers who filed electronically and chose direct deposit.
Crowdfunding Taxable? The IRS stated that a crowdfunding website or its payment processor may be required to report distributions of money raised if the amount distributed meets certain reporting thresholds by filing Form 1099-K, Payment Card and Third Party Network Transactions. The thresholds are significantly decreased, so be aware. Prior to 2022, the threshold for a crowdfunding website or payment processor to file and furnish a Form 1099-K was met if, during a calendar year, the total of all payments distributed to a person exceeded $20,000 in gross payments resulting from more than 200 transactions or donations. For 2022 and beyond, the threshold is lowered and is met if, during a calendar year, the total of all payments distributed to a taxpayer exceeded $600 in gross payments, regardless of the number of transactions or donations.
Contact an Experienced Columbus, Ohio Tax Attorney
IRS Debt Settlement Tax Lawyer | Gahanna, Ohio
If you have tax questions or received a notice from the IRS that you do not understand, contact the experienced Columbus, Ohio tax lawyer at Porter Law Office, LLC today for a case evaluation. Our firm handles complex IRS tax controversies. Contact the experienced Columbus, Ohio tax attorney at Porter Law Office, LLC today for a consultation to discuss your particular IRS tax needs and options.