‘Groundhog Day’ at the IRS: Returns are piling up, phone delays are getting worse

It’s groundhog day at the tax office.

After racking up a daunting backlog from 2021, the agency has an even bigger backup for this tax season than a year ago and its pace of processing paper returns is slowing, according to a monitoring report released Wednesday. .

The National Taxpayer Advocate, an independent watchdog within the IRS, also said taxpayers are experiencing longer wait times on the phone and delays in processing paper returns range from six months to a year. .

The Taxpayer Challenges Report, which must be submitted twice a year to Congress, comes a day after the Internal Revenue Service announced it was on track to clear its backlog of 2021 tax returns this week.

The goals report to Congress contains proposals for lawmakers to consider moving forward.

“When I released my annual report to Congress six months ago, I wrote that ‘the paper is the kryptonite of the IRS, and the agency is still buried there,'” the national attorney wrote. Taxpayer Erin Collins in the report. “Fast forward to those goals Report: It’s Groundhog Day.

She added, “At the end of May, the IRS had a larger backlog of paper tax returns than a year ago, and its pace of processing paper tax returns was slowing.”

Collins, who serves as IRS ombudsman, said of the agency’s problems, “The math is daunting.”

According to the report, at the end of May, the agency had a backlog of 21.3 million unprocessed paper tax returns, an increase of 1.3 million from the same period last year. The agency fell short of its goal of hiring 5,473 new employees to process returns, with only 2,056 employees hired.

In addition, telephone wait times have increased to 29 minutes on average, compared to the average wait time of 20 minutes last year.

“The fact that the backlog continues to grow is deeply concerning, primarily because millions of taxpayers have been waiting six months or more to receive their refunds,” Collins said.

Jodie Reynolds, spokeswoman for the IRS, said the numbers in the report “are neither the most accurate nor the most recent numbers.”

“Today the IRS is way ahead of processing tax returns compared to a year ago,” Reynolds said. “The IRS continues to make substantial progress on inventory,” bringing in new contractors, shifting staff and requiring employees to work overtime, she said.

In a joint letter to Sen. Ron Wyden, D-Ore., who heads the Senate Finance Committee, Assistant Treasury Secretary Wally Adeyemo and IRS Commissioner Chuck Rettig said about six to eight employees of the IRS manually processes each paper return filed.

“What the agency needs to avoid a crisis like this in the future is sustainable, multi-year funding to invest in revamping outdated technology, improving service to taxpayers, and increasing voluntary compliance,” the letter reads.

“These resources will be crucial in automating operations to increase efficiency.”

Tony Reardon, president of the National Union of Treasury Employees, said “no one is feeling the strain of backlogs more than the frontline workers who have been going through this paperwork for months now.”

“Employees working on backlogs have been doing so at IRS facilities across the country throughout the pandemic,” and working overtime to resolve the issue.

He said the IRS “desperately needs more staff, more resources, and updated technology, all of which are needed to avoid future backlogs.”

The Taxpayer Advocate report said credit is due to the agency’s management for the burden it bears with “an extraordinarily complicated tax code”, outdated technology, inadequate staffing and persistent challenges resulting from the distribution of programs related to COVID-19.

“Despite these challenges, the tax system as a whole has held up well over the past two years,” the report said.

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