covid chokes an already crippled irs

can busy season get any worse? we’re about to find out.

by 卡塔尔世界杯常规比赛时间

the year 2021 gave tax preparers and taxpayers one big mutual hope — the hope that such a year never happens again.

more for tax season 2022: eight ways to charm a client | prepping for tax season: plug small leaks before they become big floods | four issues with ‘quick’ tax questions | updated: accountants critical of competitor price-cutting | when to pick up the phone this tax season | get your team ready for tax season | automate busy season with apps you already use | these five procedures will simplify your tax season | 11 steps to better client tax instructions | 12 ways to squeeze fun into tax season | six ways to get paid faster | survey: worries for small business clients | busy season forecast: more chaos |

exclusively for pro members. log in here or 2022世界杯足球排名 today.

and just in case congress didn’t get the message, national tax advocate erin m. collins submitted to that august body an annual report that pulled no punches and spared no explication. the new filing season starting jan. 24 could bring hitherto unbelievable problems.

the situation, she said, was dire.

really dire.

perfect storm

“this past year and the 2021 filing season conjure up every possible cliché for taxpayers, tax professionals, the irs, and its employees,” collins wrote. “it was a perfect storm; it was the best of times and the worst of times; patience is a virtue; with experience comes wisdom and with wisdom comes experience; out of the ashes we rise; and we experienced historical highs and lows.”

among the highs:

• most e-filed returns were processed timely.
• 130 million refunds were issued.
• 478 million stimulus payments were sent.
• 36 million families received advanced child tax credits.

among the lows:

• the irs didn’t finish processing all 2019 returns until june 2021.
• the season closed with 9.8 million returns in the error resolution system, each requiring manual processing, and millions more came in later.
• recovery rebate credit claims resulted in over 11 million math error notices.
• as of late december, the irs had a backlog of 2.3 million unprocessed forms 1040-x, with processing taking 20 weeks or longer.
• irs reps were able to answer only 32 million of 282 million phone calls—just 18 percent—with hold times averaging 23 minutes, often much longer than that.
• for uncounted millions of taxpayer, the “where’smyrefund? tool couldn’t answer the one question it was built to answer.

a series of bad deals

but collins understood the circumstances and complimented the irs on its efforts, saying it “deserves credit for playing the hand it was dealt.”

and a pretty bad hand it was, the worst in a series of bad deals that have been worsening for a decade.

on the workload side, the number of individual returns rose by 19 percent after 2010.

on the resources side, the irs baseline budget shrank by 20 percent in that same decade. consequently, the irs workforce reduced 17 percent.

add it all up, and it doesn’t add up. it adds down. more work, fewer workers. something had to give, and what gave was the service’s service.

and then covid came along, scattering workers to home offices and socially distant spaces.

and then congress came along, charging the irs with administering several covid financial relief programs, including three rounds of stimulus payment, monthly payments of the advanced child tax credit, a reduction of the taxability of unemployment compensation smack-dab in the middle of the filing season, and other provisions directly impacting tax administration.

a wrench in the works

granted, congress provided some supplemental funding for all those programs, but even under the best of circumstances, it takes a while to enlist and train a small army of new employees.

ultimately, covid was a wrench in works that weren’t working well anyway.

“there is no doubt the pandemic has had a big impact,” collins said, “but taxpayer services and technology at the irs were inadequate long before the pandemic.”

lack of funding was the disease behind the disease. it systems were antiquated to the point of dysfunction. phones were understaffed. taxpayer assistance centers were closed. paperwork and processes were beyond the capacity of a skeleton crew.

“it is important to recognize that, for the most part, the pandemic did not create new challenges for the irs as much as it highlighted longstanding challenges and areas that require attention,” collins wrote. “my main recommendation to congress is to provide the irs with additional funding to enable it to meet taxpayer needs and to conduct sufficient oversight to ensure the additional funding is well spent.”

posted on january 14, 2022