IRS Nonprofit Mail Handling Halted Over A Month By Virus

By Joshua Rosenberg
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Law360 (June 8, 2020, 4:58 PM EDT) -- The Internal Revenue Service's processing of mailed-in tax-exemption applications stopped for more than a month in March and April under social distancing protocols put in place because of the COVID-19 pandemic, an agency official said Monday. 

The IRS stopped processing paper applications for tax-exempt status along with nonprofit information returns from March 26 through the end of April, said Margaret Von Lienen, director of exempt organizations in the agency's Tax Exempt Organizations and Government Entities Division. She spoke during a webinar hosted by the TEGE Exempt Organizations Council, an organization formed to facilitate communication between the agency's TEGE division and the practitioner community, according to its website. 

The agency was "required to scale back mail processing functions to comply with the social distancing recommendations," Von Lienen said.

"The IRS has continued to receive and store mail, but we have reduced responses to paper correspondence," she said.

The IRS has since resumed processing those applications, Von Lienen said, but the agency expects there will still be a delay on its website for those seeking to check the status of their Form 990 submissions. Forms 990 provide the IRS with basic operational information about nonprofits. 

The agency's ability to process mail was severely compromised by the global breakout of the novel coronavirus, which causes COVID-19, a respiratory disease. According to a report on IRS data compiled by the House Ways and Means Committee, as of mid-May, the agency had a backlog of about 10 million unopened pieces of mail, including nearly 5 million tax returns.

The other 5 million unopened mail items included payments, payment vouchers, general correspondence and information returns, according to the report. 

As of May 9, the agency had approximately 24,000 employees on so-called weather and safety leave, 47,000 employees who were teleworking and 2,000 employees working on site for at least 30 hours per week, according to the report.

Last week, IRS employees began returning to work in Kentucky, Texas and Utah. The agency said in an internal email that it plans to reopen operations in eight additional states and Puerto Rico by the end of June.

The National Treasury Employees Union, which represents agency workers, could not immediately be reached for comment on Von Lienen's remarks. 

--Additional reporting by David van den Berg. Editing by Vincent Sherry. 

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