The IRS, COVID & Last Year’s Taxes — Expect Refund Delays


COVID has the Internal Revenue Service chief, Charles Rettig and his staff, worried. At year end, the IRS usually has a few million returns to be processed. When 2020 ended, there were over 35 million.

While the IRS won’t say how many of that 35 million got processed after year’s end, we do know it’s going to be awhile before last year’s returns are completely done. That bodes bad for this year’s submissions.

Though we don’t need to tell you this, good journalistic practices say we must. Here’s what’s happened. COVID hit taxpayers and tax preparers hard last year so they got behind. The Treasury also blames years of budget cuts for staffing problems. Add the loss of employees from those who got sick from the pandemic’s different forms of the virus, and you have an agency that’s really struggling.

If you’re one of the people wondering what happened to your return, or that of your business, good luck reaching the IRS. The watchdog group, National Taxpayer Advocate said just 9% of calls are answered and only 3% have been answered on the 1040 support line.

Just as bad — or maybe even worse — many of the in-person centers operated by the IRS closed because of the pandemic. John Koskinen — who headed the IRS under Barack Obama — says Republicans forced budget cuts that led to a 25% cut in staff.

By definition, no matter how much more efficient you are, you cant lose 25 percent of the workforce and assume you can do the same volume of work,” Koskinen said. “Its a problem across the board — information technology; revenue agents; people answering the phones. The fact the filing season has gone so well over the last three years is an amazing tribute to the capacity of the workforce, but if you keep underfunding the place its not a question of whether it will have a major problem — its a question of when.”

To help the IRS, the Biden administration is pushing Congress to increase funding. It’s part of Biden’s Build Back Better agenda. As you know, Build Back is on hold for now because of political party bickering and a Democrat — Sen. Joe Manchin — who has held up the bill.

Mark Everson who headed the IRS under George W. Bush disagrees and says funding isn’t the problem. Everson said the non-response of the IRS is mostly pandemic caused. They went down early and hard from the pandemic and theyve never really fully recovered. For both taxpayers and regular practitioners, the inability to get through on the phones is very frustrating,” he said.

Source link: The Washington Post —

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