IRS Delays Will Be “Extraordinarily High” Again, Warns The Agency’s Taxpayer Advocate

Taxes

The Internal Revenue Service will have “extraordinarily high” delays again in processing returns, the agency’s National Taxpayer Advocate Erin Collins told Congress today.

She cautioned there’s no magic bullet to get the IRS out of a “deep hole” in her appearance before the House Ways and Means Committee Oversight Subcommittee.

The IRS is starting the 2022 filing season severely behind the eight-ball, Collins asserted, because it has millions of returns left over from last year it hasn’t processed, including 6 million unprocessed original individual returns (Form 1040 series) and 2.3 million unprocessed amended individual returns (Forms 1040-X) with more than 2 million employer’s quarterly tax returns (Forms 941 and 941-X).

Last year, said the expert, was the worst year for taxpayers trying to reach the IRS by phone. In 2021, only 11 percent of taxpayers were able to reach a customer service representative and for those who did, the average wait time was 23 minutes.

“There is an end in sight (to the backlog), the question is how quick we get to the end….We are not doing the job we should as an agency,” Collins told the hearing.

For short term fixes, Collins said the IRS should explore options to increase compensation for processing employees, minimize hiring lags, and utilize outside consultants to assist.

Additionally, she advised the tax collection agency to suspend all automated collection notices until the IRS gets current in processing original and amended tax returns and taxpayer correspondence and defer automated collection activity until 45 days after the IRS addresses the merits of a taxpayer’s response to an adjustment, a proposed liability, or a math error assessment.

The long-term solution, she said will require an investment in infrastructure, touching everything from basic taxpayer service and filing season processing to tax law.

Collins added the long wait times could be improved if the IRS employed customer callback technology.

“Many taxpayers call the IRS multiple times before they get through, and if effectively used, customer callback technology could substantially reduce the need for repeat calls, thereby reducing call volumes and serving taxpayers more effectively,” the Taxpayer Advocate explained.

Ranking Oversight Subcommittee Republican Tom Price of South Carolina noted the IRS has been trying to hire 5,000 people in the last year but has put on only short of 200.

He asserted more funding in the long term is not the answer to today’s problems:

“The long-term solution is to force the IRS to automate. If we were automated, we wouldn’t be looking at the backlog we’re looking at. The IRS is a dinosaur.”

During the session Bradley Schneider (D-IL) said the workload for the IRS is up 20 percent since 2010, but the money the agency receives is down by about 20 percent.

The Congressman said one of the problems the IRS has with IT is that 90 percent of its IT budget is going to maintenance.

Collins acknowledged IRS software dates back to the 1960s with computer languages such as COBOL and the agency won’t be able to reduce its IT dependence on maintenance significantly until it can modernize.

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