the irs can't keep upWe all struggled with a pandemic, political and social turmoil, fires, drought and even flood.  Many of us, particularly tax practitioners, experience and continue to endure unprecedented delay with the Internal Revenue Service (the IRS).

The delay affected processing times, refund notices and resulted in random IRS notices and requests.  In the Wall Street Journal article, “Good News Tax Evaders!  The IRS Can’t Keep Up!" (Published on February 16, 2022), we learn why. This article outlines the many challenges that the IRS faces in addition to the pandemic. Those challenges include the following:

  • The IRS computer system is more than 50 years old
  • Taxes are going unpaid because returns aren’t being processed
  • Phone calls go unanswered, and correspondence takes almost a year to process
  • Last week National Taxpayer Advocate Erin Collins told Congress that as of May, 2021, the IRS had a backlog of 35 million tax returns requiring manual processing – including returns filed electronically – and nearly five million pieces of unprocessed paper correspondence.
  • A decade of budget cuts have thinned the agency’s ranks
    • At the end of 2021, the IRS had 83, 265 employees, down from 94,000 in 2011
      • Among them, only 7,177 are younger than 30, and 2,384 under 25
  • The IRS has recently advertised for 5,000 openings for return processors and has filled only 179 positions
  • The IRS’s work has grown more demanding owing to:
    • Complex tax laws
    • Social programs
    • Three stimulus payments
    • Child credits
    • Employer COVID tax credits
  • The IRS uses Cobol, a programming language conceived in 1959 whose syntax and structure are inconsistent with modern computer languages
    • Each year the archaic system spews out millions of proposed adjustments to taxpayers
    • This triggers a vicious circle, in which erroneous notices generate a torrent of phone calls and mail that go unanswered
  • During the 2021 filing season, the IRS was receiving 1,500 calls a second
  • Out of 150 million calls last tax season, 7% were answered
  • Only 3% of the 85 million callers seeking help with the individual tax Form 1040 reached a representative
  • While the IRS says its budget is under greater strain than ever, there is no explanation why $1 billion appropriated in March 2021 remains unspent
  • A May 2021 report from the Treasury Inspector General for Tax Administration found that 42% of printers and copiers at three IRS tax-processing centers were unusable or broken
  • Because the IRS lacks scanning technology, staffer type in data for many paper returns

Sadly, we do not anticipate any material improvements with the IRS.  We will be sure to keep you updated.

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