six more ways to fix the irs

they’ll take some time, but not much money or technowizardry.

by 卡塔尔世界杯常规比赛时间

when national tax advocate erin m. collins sat down before the house subcommittee on government operations this april for hearings titled “irs: is it ready?” she spoke truth to power.

she told power that the irs is truly in big trouble.

  • its backlog of unprocessed returns and unanswered mail is unprecedented in the history of the united states.
  • last year its agents answered only 11% of incoming phone calls.
  • its “where’s my refund?” and “where’s my amended return?” online tools often failed to answer either question.

more: six quick solutions for irs backlogs | accountants agree: the top five ways to fix the irs | irs tops list of busy season problems
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she also told power an embarrassing truth: there are solutions. they just have to be enacted.

but there’s one other truth: the solutions cost money.

as detailed in an earlier part of this series on fixing the irs, the short-term solutions wouldn’t cost a whole lot, and they would do much to alleviate the current backlog. collins said the irs should

  • get “all hands on deck” (i.e., reassign people) to process returns instead of problems of lower priority;
  • pay employees more, minimize hiring lags and use outside consultants;
  • waive penalties for 2020 and 2021 irregularities to free up irs agents to process returns;
  • suspend automated collection notices until the mail backlog is cleared up;
  • dedicate a team to accelerate the processing of claims for tentative refunds and employers quarterly returns; and
  • provide a dashboard at irs.gov so taxpayers can see delays and estimated waiting times.

longer-term solutions

collins’s long-term solutions should help the irs avoid the situation it’s in today. and they will be neither expensive nor technically difficult to deploy.

improve online taxpayer accounts to facilitate secure email

online taxpayer accounts were a good idea that somehow got botched. functionality is needlessly limited. taxpayers can’t use their accounts to view images of past tax returns, most irs notices or proposed assessments. they can’t file documents. they can’t even update their addresses.

these are online functions that financial institutions mastered long ago. if the irs could learn to do it, paperwork, phone calls and hard-copy mail could be reduced considerably.

utilize modern scanning technology

scanning handwritten or even typed tax returns is prone to error. manual transcription is even more fraught with danger.

but for more than two decades, companies that provide tax software have been able to produce 2-d barcodes that contain all the information that’s in the return. by scanning a 2-d barcode, the irs can digitize the return with almost 100% accuracy.

collins told congress that if scanning technology can be updated by the 2023 season, the current paperback return backlog could be cleared up within a year.

reduce barriers to e-filing

kudos to the irs for getting over 90% of taxpayers to e-file their returns. but even that high number leaves millions of paper returns arriving at the irs. there are still barriers to e-filing. some little-used tax forms are not supported by the e-file system. millions of e-filed returns get rejected for irregularities. sometimes the need for an attachment precludes e-filing.

these are by no means unresolvable barriers. they can be eliminated.

automate the creation and review of amended tax returns

imagine a world where a taxpayer could log into an online account, select a return to amend, have it pre-populated so that only the relevant numbers need to be changed, and an amended return would be processed electronically.

currently, all amended returns, even if e-filed, are treated as paper returns needing manual treatment. imagine a world where that could be changed.

deploy “customer callback” technology so taxpayers and practitioners don’t need to be on hold

corporations have been doing this for decades. the technology exists. why can’t it exist at the irs?

disaster relief postponements should allow e-filing after november

typically, the irs stops accepting e-file returns before the end of november. so taxpayers whose returns are legally postponed because of a natural disaster, such as a hurricane, end up filing paper returns. a simple change of deadline would eliminate this problem and its unnecessary paperwork.

all of these solutions, from the short-term to the long-, are doable and cost-effective. a little investment today will result in more revenues in the future. at the same time, taxpayers and tax practitioner frustrations could be assuaged. let’s hope power was paying attention when erin collins offered her workable solutions.