The IRS has millions of items on its to-do list, including unprocessed returns, unanswered mail, and other tasks, and when it tried to hire 5,000 extra people for the current tax season, fewer than 200 people applied.
Taxpayer Advocate Erin Collins spoke before a House committee on Tuesday, only weeks after submitting a report warning legislators that the IRS is in crisis.
May Face A Stressful Filing Season
As millions of people look forward to obtaining refunds, Americans may face a stressful filing season with long wait times and the inability to reach the IRS for answers.
Some of the issues that were present last year have only become worse, according to Collins.
“The quality of services provided to taxpayers must be improved. And for that to happen, the IRS must clear the backlog, payout those overdue refunds, and catch up on its work “Collins stated his opinion. “The American people are entitled to better.”
The Covid Times
During the coronavirus outbreak, the tremendous backlog exploded. As of late December, the IRS still had 6 million unprocessed original individual returns and 2.3 million unprocessed revised person returns, according to Collins’ statement.
Some taxpayers who filed returns in April of last year are still waiting for refunds after ten months. There were also 1.5 million unprocessed employer quarterly returns as of early February.
For taxpayers, the difficulties have resulted in years of frustration and financial hardship.
Testaments of Hardships
Juliet Huck, a small business owner in Los Angeles, had to take out a small business loan to keep afloat when the IRS failed to send her the $6,000 she was entitled from her 2019 tax return on time.
“I’m frustrated that the problem hasn’t been resolved after two years,” Huck remarked. “I’m not sure how the IRS expects us to pay on time, but we’re fined if we don’t.”
Collins stated on Tuesday that clearing the backlog should be the top priority. “At the reorganizational of the agency’s issues and processing tax returns,” she said, is filing a paper return.
3 Million Returns to Scan
She said the IRS still has over 3 million returns to scan, transcribe, and process, describing paper returns as the agency’s “kryptonite.”
While scanners are allowed in some areas of the IRS, Collins noted on Tuesday that paper returns must be manually entered.
Throughout September, the IRS shifted 1,200 IRS employees with prior experience from other jobs to help with the inventory. However, a recent campaign to fill 5,000 employees to assist the IRS with tax-filing season received only 200 candidates.
On Hiring Issue
Collins remarked, “I don’t think we’ll be able to hire enough people to dig us out of this hole.”
She also stated that the agency will require more than the existing 1,200 personnel to assist and that tasks that do not require specific expertise may be outsourced.
On a long-term basis. Automation is another possible answer for some operations, according to Collins, but it’s tough to complete a significant IT project and modernize a decades-old system when financing is provided by Congress through continuing resolutions.
She told lawmakers that the organization requires long-term support.
Better to File Returns Electronically
Taxpayers who wish to avoid delays should file electronically rather than on paper, according to Collins. They should also request direct deposit. Third, double-check for mistakes.
Collins warned that this year’s stimulus payouts and advance child tax credit payments could lead to further inconsistencies, slowing down the tax filing process even more.
Taxpayers who have inquiries may have a difficult time getting answers. Only 32 million (11%) of the more than 282 million calls to customer service professionals were answered last year.
“The IRS reported that hold times averaged 23 minutes among the 1 in 9 calls who were able to reach an (agent),” Collins said in a written statement. “Taxpayers who waited on hold for an extended amount of time and then hung up before a CSR answered their calls are not included in the IRS data on-hold times.
Hold times were frequently significantly longer, according to tax experts and taxpayers, and aggravation and discontent with the poor phone service were high throughout the year.”
Collins also stated on Tuesday that during the peak of tax filing season, the IRS was only able to answer only 4% of calls.
House Demands Incentives
At Tuesday’s session, some Republicans called for incentives to attract people back to work, pointing out that no one applied for the IRS jobs.
Democrats blamed the Biden administration for providing incentives for people to stay at home, citing years of agency funding cuts.
“The IRS was purposefully gutted as part of the former administration’s goal with his Republican co-conspirators, to do everything possible to elevate the fortunes of the wealthy, well-connected, and well-connected and prevent them from paying their fair share,” House Democratic Caucus Chairman Hakeem Jeffries said. “The bottom line is this: That is the fact of why we are in this situation.”