FIRPTA Tax Blog
Following up on DIRECTS’ most recent blog post, where I discussed the concerning issue of IRS employees who had become frightened to go into the (cramped) IRS offices and do work which I really believe can only be accomplished in their offices, the story has taken a profound and potentially confrontational turn. Starting Monday (April 27), the IRS has ordered its “mission critical” employees back into the IRS offices. To reassure the employees (I guess), the IRS is requiring PPE to be utilized at all times within the IRS offices, but the IRS may not be able to provide such PPE to the employees. A leaked IRS internal memo suggests the employees consider “utilizing cloth face coverings fashioned from household items or made at home from common materials at low cost” if they have no other PPE available. Ugh. The head of the Treasury Employees Union stated “the initial wave [of employees returning to the IRS offices] will include about 10,000 employees at 10 locations who will be opening taxpayer correspondence, handling tax documents, taking taxpayer telephone calls and performing other functions related to the filing season.” At least some employees are being offered incentive pay, and (at this point) the employees are not being forced to return (they are permitted to turn down the order to return to the office). Many IRS employees had been permitted to work from home recently (given the current health crisis ravaging the country), but from the what we’ve been seeing recently at DIRECTS, working at home does not lead to the speediest of results from the IRS. Nobody has been able to call the IRS for about a month, and mail sent to the IRS “has been piling up in trailers”, according to the Wall Street Journal.
The issue of whether the IRS employees work from the actual IRS offices is of particular interest to us at DIRECTS (Domestic and International Real Estate Closing Services), because we focus on non-US sellers of US real estate, who are always awaiting large tax refunds this time of year, plus our 2020 foreign sellers who are applying for ITIN’s and applying for 8288-B/ withholding certificates are very much interested in speedy IRS compliance as well. Our FIRPTA-related work requires the IRS employees to be in their offices and on their game, there is no doubt in my mind. This push by the IRS has been prompted by the need to inject the stimulus checks into the economy, but really the IRS needs its employees back in the offices for all reasons, including processing tax returns and issuing refund checks (such as the large refunds typically due non-US sellers from the prior year). We have seen the time for the IRS to process refunds, ITIN’s and 8288-B withholding certificates really start to drag sharply in the last month, so for us this (push back into the IRS offices) really is needed.
Is this the end of it; the IRS employees are just going to go back to the IRS offices, no problem? I doubt it. As of Monday, they are not actually required to go back in (it appears to be just a request from the IRS officials). What if there are not many IRS employees who agree to simply return to the the IRS offices? Plus members of Congress have already begun openly complaining that the employees are not being given PPE by the IRS. Moreover, I have no doubt these people are scared. One incident of Coronavirus in one over-stuffed IRS processing center and this could become a huge mess. It might not even take an incident for this to become a huge mess.
Michael W. Brooks