Taxpayers face “unprecedented” delays getting their refunds, IRS watchdog says

The Inside Income Service is dealing with a good larger backlog for this tax season than it did a 12 months in the past, with delays creating “unprecedented monetary difficulties” for taxpayers, in response to a report launched Wednesday.

The Nationwide Taxpayer Advocate, an unbiased watchdog throughout the company, discovered that delays in processing paper returns have been working six months to 1 12 months, and taxpayers are experiencing longer wait occasions on the phone.

The report on taxpayer challenges, which should be submitted twice a 12 months to Congress, comes sooner or later after IRS introduced that it’s on observe to eradicate its 2021 backlog of tax returns this week.

The Goals Report back to Congress comprises proposals for lawmakers to think about going ahead.

“On the finish of Might, the IRS had a bigger backlog of paper tax returns than it did a 12 months in the past, and its tempo of processing paper tax returns was slowing,” Nationwide Taxpayer Advocate Erin Collins wrote within the report. 

“That the backlog continues to develop is deeply regarding, primarily as a result of thousands and thousands of taxpayers have been ready six months or extra to obtain their refunds,” Collins added.

“Unprecedented monetary difficulties”

In accordance with the report, on the finish of Might the IRS had a backlog of 21.3 million unprocessed paper tax returns for companies and people. That is a rise of 1.3 million over the identical time final 12 months. The company fell brief on its aim to deliver on practically 5,500 new staff to course of returns, with simply 2,056 staff employed. 

“Notably for decrease earnings taxpayers who obtain Earned Earnings Tax Credit score advantages, tax refunds could represent a major proportion of their family earnings for the 12 months,” Collins wrote. “Thus, these processing delays are creating unprecedented monetary difficulties for thousands and thousands of taxpayers and outright hardships for a lot of.”

Moreover, telephone wait occasions elevated to 29 minutes on common, in contrast with final 12 months’s 20-minute common wait time. And taxpayers’ possibilities of getting by to an agent — already dismal earlier than the pandemic — plummeted. Final 12 months, solely 10% of taxpayer calls have been answered by a customer support consultant, the report discovered, in comparison with 1 in 4 earlier than the pandemic.

Jodie Reynolds, a spokesperson for the IRS, informed the Related Press that the report’s numbers “are neither probably the most correct nor most up-to-date figures.”

“Right now, the IRS is working nicely forward of tax return processing in comparison with a 12 months in the past,” Reynolds stated. “The IRS continues to make substantial progress on the stock,” bringing on new contractors, shifting employees and mandating worker additional time, she stated.

Know-how overhaul wanted

In a joint letter this week to Sen. Ron Wyden, the Oregon Democrat who heads the Senate Finance Committee, Treasury Deputy Secretary Wally Adeyemo and IRS Commissioner Chuck Rettig stated that it requires six to eight IRS staff to manually deal with every paper tax return that’s filed.

“What the company requires to keep away from a disaster like this sooner or later is sustained, multi-year funding to put money into overhauling antiquated know-how, enhancing taxpayer service and growing voluntary compliance,” the letter stated.

Tony Reardon, president of the Nationwide Treasury Workers Union, stated “nobody feels the strain about backlogs greater than the front-line staff who’ve been plowing by that paperwork for months now.”

He stated the IRS is “in determined want of extra staffing, extra assets and up to date know-how, all of that are vital to forestall future backlogs.”

The Taxpayer Advocate report stated the IRS’ management deserves credit score for coping with “a very sophisticated tax code,”  outdated know-how, insufficient staffing and lingering challenges which have come from distributing COVID-19 associated packages.

“Regardless of these challenges, the tax system, as a complete, has held up nicely in the course of the previous two years,” the report stated.

CBS Information’ Irina Ivanova contributed reporting.

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