So how was last year’s tax season, according to an Internal Revenue Service official?
,‘No way to sugarcane in tax administration in 2021: It was horrifying from the perspective of crores of taxpayers.’,
That’s Erin Collins, the IRS’s national taxpayer advocate. in a report on Wednesday For the Congress which was full of criticisms and recommendations.
Among the criticisms: Last year’s delay in processing income tax returns, especially on paper returns, too often translates into waiting for refunds in a matter of months.
there was “Where’s my refund?” Online portals, which were often without useful information explaining why refunds did not come.
Then millions of annoyed callers were unable to get a single person on the IRS Taxpayer Help Line to answer tax questions.
In Collins’ own corner of the IRS, the Taxpayer Advocacy Service, employees were dealing with “limited resources,” and had to begin to address cases where the only problem was the delay in processing tax returns so they had little time to focus. Bandwidth to be especially complex taxing problems which some filers had to face.
Such hard work is not a new revelation to taxpayers and tax professionals who have passed the test of tax time. But the timing of the Collins report sheds a new light on what may lie ahead.
The reports came days after IRS officials tried to manage expectations on a potentially “disappointing” upcoming 2022 tax season, which begins January 24. The Treasury Department and the IRS say it is doing its best with a staff and budget that has shrunk over the years.
According to Collins, the IRS workforce has declined 17% since fiscal year 2010, even as its workload (measured through personal tax returns) has increased by 19%. The IRS budget has contracted by about 20% in that time, when adjusted for inflation. Despite the problems, she credits the IRS for many parts of its pandemic performance.
This includes the distribution of multiple rounds of stimulus checks, monthly child tax credit payments to millions of households and stretching the tax filing season, even as it grapples with significant new changes to the tax code.
Additional IRS funding is important, Collins said. Here’s how Collins said she would use the money to lower taxpayers’ blood pressure.
• More customer callback capabilities so people don’t have to wait on hold. That way, taxpayers and tax professionals who call the IRS for help don’t have to wait on hold and instead get a call back when the next representative is ready.
• Improved scanning technology for faster processing of paper tax returns and fewer errors and hassles in electronic filing for certain tax documents.
• Improvements to online services, such as Where is my refund? Portal, to give users more details about the reasons for refund hold-up and the estimated time of issuance.
• A filing season “dashboard” that displays the average length of time to complete a tax return.
The 2022 tax season comes as Capitol Hill talks on the Biden administration’s Build Back Better bill seem to be stalled. The bill would also include adding $80 billion over a decade to the IRS budget for more employees and better technology to catch tax fraudsters, as well as funding to improve customer service.