The central square – The final weekend for Americans to file their taxes by the Monday deadline has arrived, but the Internal Revenue Service is still facing large backlogs for personal and business returns.
IRS Commissioner Charles Rettig testified before Congress last month, promising to settle the 20 million unprocessed 2021 tax returns by the end of 2022. He cited a range of reasons for the backlog, including “new responsibilities”, modernization delays and funding uncertainty. which slows down hiring.
“When we’re faced with long-term continuous resolutions (CRs), we typically freeze almost all external hires,” he said. “We are taking this action to ensure that we have funds to pay all employees, including any applicable salary increases. Last fall, we increased our payroll and investment (W&I) division despite CR, hiring at risk without the funding in place to support these positions, but assuming that future resources would be provided by enactment. possible FY2022 credit, to help process our inventory.
Observers say trillions of dollars in social spending passed by Congress overwhelmed the IRS last year. The agency has been tasked with distributing and tracking much of the money, such as stimulus payments and the monthly child tax credit to eligible families.
“The problems the IRS is facing stem primarily from Congress giving responsibility for distributing pandemic-era social programs to an agency that is supposed to exist for revenue collection, not benefit administration. “said Alex Muresianu, tax expert at the Tax Foundation. “The effects of this disconnect have only worsened during the pandemic: the various relief measures (CARES, the early 2020 appropriations act, ARP) have enormously increased the administrative responsibilities of the IRS, making them responsible for the distribution of hundreds of billions of additional dollars.
“And although they have received a budget increase to try to make this process smoother, it is difficult to improve their capacity so quickly,” he added.
Rettig’s testimony seems to support this idea, at least in part, with several references to the agency’s increased workload.
“We continue to balance several unprecedented demands, including the start of filing season as well as continued work on significant new tax provisions,” Rettig said. “And we remain focused on many taxpayer-related issues and have pursued innovative ideas and processes not previously deployed by the IRS with the goal of making improvements to the current inventory and providing meaningful services to taxpayers. The reality at the IRS is that we know we need to do better; we are committed to doing better and we are moving in a positive direction.”
Republicans on the House Oversight Committee sent a letter to the IRS outlining “COVID-19-related telecommuting policies” allowing most IRS employees to work remotely as well as outdated software.
“For many Americans, their tax refund can equal six weeks of net income,” the letter says. “The volume of tax returns and refunds made each year shows the significant impact processing delays could have for the average American. Processed returns are also critical for those who may be eligible to apply for other benefits. such as loans administered by the US Small Business Administration, so it is imperative that the IRS take steps to mitigate any processing delays, which can delay repayments and access to economic assistance programs.
The IRS issued an “urgent reminder” earlier this year telling Americans to file electronically “to expedite refunds” this year. Rettig published an op-ed in Yahoo News last month echoing that tone.
“As the IRS begins this tax season, it continues to face tremendous challenges. Our dedicated staff have done everything they can to prepare for filing day on April 18,” he said. he declares. wrote. “Today, millions of people are still waiting for previous years’ returns to be processed and refund checks to arrive in the mail, while preparing for their next tax return. Although we cannot resolve these significant issues immediately, our employees are doing all they can, and I am committed to returning to normal inventory levels by next year.