IRS sends warning letters to 250,000 workers in a bid to recover €95million from Covid wage support

The proceeds are writing to 250,000 PAYE workers, urging them to file tax returns for the last three years to collect taxes owed on Covid wage supports.

ax officials have been sending out the correspondence over the past two weeks – in many cases to wage earners who are not normally required to file returns – setting out their provisional income tax positions for 2019-2021.

The letters instruct taxpayers to submit the paperwork by November 16 or face an immediate assessment of any taxes due “based on all available information.”

“The primary objective of these letters is to encourage PAYE taxpayers with a preliminary year-end tax position indicating an underpayment and/or overpayment for any or all of the years 2019, 2020 and 2021 to complete and file an income tax return for those years ‘ said a spokesman for the tax authority.

“This is consistent with Revenue’s goal of encouraging PAYE taxpayers to self-manage their tax affairs, claim their tax credits and declare additional revenue on an annual basis. This ensures that PAYE taxpayers pay the right amount of tax at the right time.”

But the real goal may be to help the many thousands of people facing tax bills resulting from the Covid support payments that benefited them in 2020 and 2021, according to Marian Ryan, consumer tax manager at Taxback.com to set on fire.

She said this notice differs from the IRS’s previous mass requests for taxpayers to file tax returns, particularly since this year’s letter includes individualized tax statements for the first time.

“Revenue sends letters every year, but they’re completely different in tone — much nicer,” she said. “We believe the format change is intended to capture wage subsidies and PUP recipients who owe money. It is a powerful push in the right direction.”

According to Revenue, 140,000 of the targets it’s written to owe taxes over the past three years total $95 million.

But a significant number – 110,000 – have overpaid taxes in that period and owe them a total of €85 million of revenue they receive when they settle their returns.

“There will be people who have received PUPs or wage subsidies who don’t know about the tax liability, and the earnings need to be seen to try to get them back,” said Ms Ryan, who said many taxback customers have clashed over one Surprise contacted her liability.

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An almost empty ladies street during Covid

“It causes a little bit of anxiety and takes away from what little bit of sparkle we have in the budget.”

She said Taxback sent out an email urging customers not to panic as the earnings allow for four-year repayments through a reduction in tax credits.

As of last month, almost 300,000 people who had received Covid support payments had not submitted declarations and €291 million in unpaid taxes were outstanding.

Some of them will owe bills of up to €2,500 as no income tax, PRSI and USC have been deducted at source as would be the case with wages.

“The quickest and easiest way for PAYE customers to file an income tax return is online via myAccount at www.revenue.ie,” said the spokesman for the tax authority.

“This allows the customer to quickly review their income information and only need to update the draft statement if they have additional income from another source or if there are credits or reliefs or expenses that they have not yet claimed.

“The opportunity to submit the income tax return will remain after November 16th. In order to avoid cases of hardship, any underpayments will be offset over a period of four years by reducing tax credits.”

https://www.independent.ie/business/personal-finance/tax/revenue-issues-warning-letters-to-250000-workers-in-bid-to-recoup-95m-owed-from-covid-wage-supports-42120489.html IRS sends warning letters to 250,000 workers in a bid to recover €95million from Covid wage support

Fry Electronics Team

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