The Internal Revenue Service will kick off the approaching tax season with a backlog of at least 10 million unprocessed returns from last year, according to a new report by the national taxpayer protection agency.
The pile of profits that remain are from “the most challenging year taxpayers and tax professionals have ever experienced,” the advocate, Erin M. Collins, wrote in her annual report.
While the backlog isn’t too different from last season, it’s a much higher number than the unspent returns the IRS typically faced before the pandemic.
According to the report, a big reason for the piling up, is that the federal government has forced the IRS to administer various stimulus payments and other programs during the pandemic. That means the agency, which has had a shrinking budget and workforce in recent years, has had to reallocate a lot of resources to deliver those bailout programs.
Those factors have led to a “terrible” filing season in 2021 from a taxpayer perspective, Ms. Collins wrote in her report, which was sent to Congress on Wednesday. Last year, the vast majority of taxpayers – 77% – received refunds on their 2020 tax returns, but tens of millions of them were delayed.
“Paper is the IRS kryptonite, and the agency is still buried in it,” Collins said in a statement, referring to the millions of returns that make up the bulk of the backlog. The Office of Taxpayer Advocacy, led by Ms. Collins, is an independent organization within the IRS focused on issues of taxpayer rights and services.
IRS itself This week’s taxpayer warning that staff shortages and backlogs will translate into another frustrating filing season, which begins January 24 and runs through April 18 (in most states).
In a briefing Monday, Treasury officials highlighted the lack of resources at the IRS and said service levels would be lower — including the time staff would take to answer phone calls. from taxpayers when inquiring. Treasury officials note that in the first half of 2021, fewer than 15,000 employees can handle more than 240 million calls — one in every 16,000 calls.
Officials have blamed Republican lawmakers, who have blocked efforts to increase funding at the agency, for budget constraints.
The Biden administration is looking for more 80 billion dollars more than a decade for the IRS to increase staffing, upgrade technology, and improve enforcement and customer service capabilities. That request is part of the administration’s Build Back Better Act, which has stalled in Congress.
“Additional resources are needed to help our employees get more done in 2022 – and beyond,” Charles P. Rettig, IRS commissioner, said in a statement Monday.
Ms. Collins reiterated the agency’s recommendation that Congress give it enough money to do its job. Since 2010, IRS staffing has decreased by 17%, according to the report. Its workload, as measured by the number of personal profits, grew from 142 million in 2010 to 169 million last year – a 19% increase.
Over the past two years, the agency has been accused of administering a number of pandemic-related programs, including three rounds of stimulus (totaling 478 million payments worth $812 billion) and $93 billion. prepayment for child tax credit extension for more than 36 million families.
“The irony of the past year is that, despite its challenges, the IRS performed well under that circumstance,” Ms. Collins wrote.
As of the end of December, the IRS had yet to complete processing six million original tax returns, 2.3 million revised returns, more than two million quarterly employer returns, and five million corporate correspondence. taxpayers – with some filings since April and many taxpayers still waiting for refunds, advocates report. By contrast, there are less than a million unresolved profits in a more typical year, according to Treasury officials.
Even millions of electronically filed returns – which often flow through the system more quickly – have been suspended from processing because of discrepancies between the amount requested on the return and what the IRS has on file. profile.
Problems arise most often with the recovery rebate credit, which taxpayers have claimed when they do not receive part or all of it of their economic incentive payments from the previous year. Those returns had to be manually reviewed by the agency, resulting in more than 11 million math error messages. When taxpayers disagreed with the error and submitted a response, the report said, it went into the IRS’s paperwork, causing further delays in refunds.
Ms. Collins writes that these disparities are likely to grow again this tax season – this time for the third stimulus payment, issued in March, and the enhanced child tax credits. new – causing more delay in profits. The IRS is trying to solve those problems by sending notices to taxpayers who received stimulus payments and credits, showing how much they received.
Alan Rappeport contribution report.
https://www.nytimes.com/2022/01/12/business/irs-backlog-tax-returns-2021.html IRS kicks off tax season with big backlog