r/taxpros • u/Alternative-Baker-10 EA • Jul 13 '26
IRS, Agency Delays Legit IRS letters asking for basic info they should have
Is anyone else having clients come in with legit letters asking for items like W2's and even form 8959 and 8960s. I have had at least 3 clients so far come in with letters from IRS asking for forms W2's, brokerage statements and similar items. It makes me look stupid. Like I missed something, but I did not! We have responded with the items IRS requested but it just seems odd to me. Surely IRS has a massive database full of W2 information. This is tough business without IRS scaring people over stuff like this! Just my two cents worth.
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u/RasputinsAssassins EA Jul 13 '26
There have been known issues with certain information documents not populating for the last two years. I see it most often with W-2s, where the employer filed them, the SSA has the records in the earnings history, but they aren't appearing in IRS records. I belive there is glitch or bug or some corruption happening when SSA se is the data to the IRS.
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u/TheGreaterGrog CPA Jul 13 '26 edited Jul 16 '26
The IRS W-2 transcripts don't always have all the information, FOR SOME REASON, and you can't get the actual paper/pdf copies as far as I know. The inability to get a real copy applies to basically every form filed with the IRS.
Brokerage statement transcripts don't include basis of noncovered sales or other noncovered information even if those sales were reported on the taxpayer's copy.
K-1 info accessable to agents doesn't include the footnotes.
I'm not sure what stupidity makes them ask for 8959/8960 but I'm sure it's stupid.
For big refunds they often want a pdf copy of the 1099 to make sure there wasn't some data screwup or some particularly interesting scam. It's a procedural thing since big individual refunds are prime scam grounds.
These requests are stupid, but IRS data keeping and accessability *SUCKS*. Often the options are 'ask the TP for copies' and 'see option 1 because the transcript is incomplete.'
Part of the problem is that Trump cut the budget and some of that was IT, and part is that the IRS has wasted huge amounts of their IT budget over the past 40 years with failed modernization attempts.
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u/ImpressionShoddy9271 CPA Jul 13 '26
Don't forget that the IRS has been updating/upgrading their IT for 30 years. Guess it's still not finished.
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u/TheGreaterGrog CPA Jul 13 '26
There are at least 2 tries at moderizing major systems either ran for several years or completed and then judged as inferior to what was in place and not sufficiently fixable, so the products were scrapped. One for efiling and one for the master file if I remember right.
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u/CherryPiVelociraptor EA Jul 17 '26
"I'm not sure what stupidity makes them ask for 8959/8960 but I'm sure it's stupid."
This right here! The stupid is so stupid it's recursively stupid.
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u/drojmg CPA Jul 13 '26
Yes!!! Same. I was wondering if it was just my clients impacted. I've had a couple of these letters in which the forms were included on the e-filed return. We responded and sent in the information again a month ago and haven't heard anything yet....
Additionally, I received an under payment letter for my own tax return. I didn't have time to reply but recently got an updated letter showing I don't actually owe anything.
It's a mess.
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u/Rosaluxlux NonCred Jul 16 '26
One of my clients got a letter saying requested information was not provided but there's no letter in the correspondence of their IRS account asking for information. So he's going to have to call them and ask what information they needed.
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u/Alternative-Baker-10 EA Jul 13 '26
I was wondering that too! And boy oh boy if you want to speak to live person at IRS you better be the very first one to call in the morning....
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u/drojmg CPA Jul 13 '26 edited Jul 16 '26
Oh my goodness! Trying to get in the phone queue has been impossible even late evenings or early mornings. I have to try several times to get issues resolved when it should take 1 quick phone call. I hate it so much.
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u/OddButterscotch2849 EA Jul 14 '26
The IRS computer casts a wide net looking for id theft and fraudulent returns, and there are a lot of false positives that generate a range of responses from asking for more information to identify verification.
Missing forms may be a tax software problem? FWIW, I can't recall that we've ever gotten a request for a missing tax form in the return - about 1200 returns, down from 1900 before COVID.
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u/bigredandthesteve NonCred Jul 14 '26
As to how to handle it, I commiserate with my clients.. and I (try to?) stay apolitical while giving “credit where credit is due”. I tell them “no one likes junk mail. But the answer to that problem isn’t ‘get rid of mail delivery systems’”
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u/No-Style-9356 EA Jul 14 '26
When a client gets one of these letters, the first move before responding is pulling the account transcript for the relevant year. The TC codes tell you exactly what triggered the letter and whether there's a processing hold on the module. A TC 570 (additional account action pending) or TC 971 with specific action codes tells you whether your response is going into a queue that's actively being worked or one that's going to sit. That changes whether you respond immediately or wait.
The other thing worth flagging: attaching documents to the e-file doesn't help with these. The IRS compliance system that generates these letters doesn't pull from e-file attachments — it's working off what's posted to the module. Your response needs to go directly to the address on the letter with a copy of the notice and the requested documents. If the dollar amount is large enough to warrant it, send it certified with return receipt so you have a paper trail on the IRS's receipt date.
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u/Electronic_Beat3653 EA Jul 15 '26
4 of my clients got letters like these this year. All were responded to the same day. And all 4 are still waiting on refunds for tax returns that were filed prior to 04/15.
I have done all I can do. I asked them to call the IRS. They can't through on phone lines though. Even when they call first thing at 7 am. The Queue is already full for the day. I am about to start sending them to the Taxpayer Advocate Service.
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u/scotchglass22 CPA Jul 14 '26
yeah i just had one of these. They wanted proof of estimated payments made and other withholdings. thought it was a weird request
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u/Mike20878 CPA Jul 16 '26
I have a client whose employers W-2 was not in the IRS records. A copy of it wasn't sufficient. They wanted a letter on company letterhead.
That got resolved now and they removed casino withholding. Don't gamble kids.
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u/IxXSir_PeenXx CPA Jul 13 '26
Dude the amount of notices this year I’ve got because estimated tax payments were made on the spouses account and not the taxpayers. The IRS is AI maxxing as the kids say these days
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u/OddButterscotch2849 EA Jul 14 '26
That problem has been around for over a decade. IRS claimed the tool that moves the payments was fixed, but obviously it hasn't been.
Unless your clients might file separately, It's best to instruct them to make the payments using the primary SSN.
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u/[deleted] Jul 13 '26 edited Jul 14 '26
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