As tax season 2022 gets underway Treasury Officials are telling taxpayers to brace for a difficult experience when dealing with the IRS this year. The IRS was already coping with systemic challenges before the pandemic, but issues related to COVID-19 and other new demands placed upon the Service has worsened the IRS’s ability to serve taxpayers.
As a result, taxpayers who file a claim for a refund, particularly those who file paper returns, may find themselves having to wait an inordinately long time for an underfunded, understaffed and backlogged IRS to process their returns. In fact, the National Taxpayer Advocate estimates the IRS had a backlog of more than 8.6 million unprocessed individual income tax returns and 2.8 million business returns as of mid-December 2021.
Taxpayers who need assistance navigating the through the filing process may wind up at the end of an extraordinarily long phone line, as the IRS has 1 person for every 16,000 calls it gets.
The Service’s ability to process taxpayer correspondence is apparently equally impaired. According to the National Taxpayer Advocate, the IRS currently has a backlog of nearly 5 million pieces of taxpayer correspondence, some of which date back to April 2021.
The IRS’s data book says between 2010 and 2019, the IRS’s budget dropped from $14.6 billion to $11.5 billion, and its workforce fell from approximately 94,000 to 73,000 employees. Further straining the Service’s limited resources, the IRS has been tasked with the responsibility of distributing several rounds of economic stimulus payments throughout the pandemic, including the monthly child tax credit checks.
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If you have any questions about how to navigate through the IRS during these trying times, please reach out to one of your local Withum Tax Controversy professionals.
