By James Angell Published: March 4, 2025
The recent annual report to Congress from the Taxpayer Advocacy Service (TAS) paints a concerning picture of the IRS’s handling of tax returns and taxpayer support.
Addressing Taxpayer Issues
Legally mandated, the National Taxpayer Advocate’s report identifies the ten most significant challenges taxpayers face when dealing with the IRS, offering administrative and legislative recommendations to solve these issues. A crucial issue highlighted in the report is the:
- Ongoing delays in resolving identity theft cases.
According to the report, “For cases closed by the IRS’s Identity Theft Victim Assistance (IDTVA) unit in Fiscal Year 2024, the average time it took the IRS to resolve identity theft cases and issue refunds to the affected victims was almost two years.”
Imagine the frustration! Victims can wait up to two years to have their tax records corrected and receive a refund after being targeted by identity theft.
While TAS has proposed changes, the IRS’s implementation will take time. What should you do in the meantime?
- File your tax return early: If you suspect your identity is at risk, file your tax return as soon as possible. If any businesses notified you during the year about potential data breaches that may have exposed your personal data, it is a signal that you may be at risk.
- Check your credit reports: You’re entitled to free copies of your credit report annually from the three major credit agencies. The beginning of the year is an excellent time to check them. If you notice any suspicious activity, file your tax return immediately. You can obtain these reports at AnnualCreditReport.com.
- Consider the IRS Identity Protection PIN program: While not for everyone, if you’re concerned about IRS identity theft, consider signing up for a unique Identity Protection PIN (IP PIN) for filing your federal tax return. It can be inconvenient, but it helps prevent someone else from using your identity to file a return.
There’s hope that the Taxpayer Advocacy report will encourage the IRS or Congress to act and help victims resolve their issues more quickly.
FinCEN Extends Beneficial Ownership Reporting Deadline
The requirement for small businesses to submit their beneficial owners to the federal government, which has been revised several times, is currently back in effect, with a new reporting deadline of March 21, 2025. This follows a legal stay of a judge’s order that sought to eliminate this requirement.
Should your business file the report?
According to the notice:
Notably, to keep with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.
The current ruling suggests that you should file… although this may change based on the notice.
Disclaimer: James Angell is a Willits-based Certified Public Accountant. His office is located at 461 S. Main St., and he can be reached at 707-459-4205.
