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The IRS is starting to see “a light at the end of the tunnel” in its customer service struggles, thanks to tens of billions in new money from Democrats. climate law and health and the authority to hire more people, according to a independent watchdog within the agency.
But that enthusiastic assessment from the National Taxpayer Advocate was tempered by a early action in the new House Republican majority to withdraw nearly $71 billion that Congress has given the IRS, although the bill approved Monday is unlikely to advance in the Democratic-run Senate.
In the report Wednesday to Congress from Erin M. Collins, who heads the office tasked with protecting the rights of taxpayers under Taxpayer Bill of Rights, Cited “increased hardship” for taxpayers last year and spoke of challenges ahead. “I’m just not sure how far we have to travel before we see the light of day,” he said.
The report outlines how the 2022 tax filing season is a continuation of years of struggle to process paper and electronic tax forms, answer taxpayer phone calls and distribute timely tax refunds.
The IRS has been more successful in clearing the mountain of unprocessed returns. The agency began 2022 with a backlog of 4.7 million individual returns and 3.6 million amended returns. By mid-December 2022, the tax collector had reduced that backlog to 1 million individual returns and 1.5 million amended returns.
By December 23, the IRS had further reduced the unprocessed backlog of individual returns by about 400,000.
“Taxpayers and tax professionals are experiencing more hardship in 2022,” the report said. “The good news is that since the end of the 2022 filing period, the IRS has made significant progress in reducing the number of unprocessed returns and correspondence.”
One reason for optimism is the infusion of billions from the Democratic-led legislation signed into law this summer. It’s meant to help rebuild an agency that hasn’t seen additional funding in decades. House Republicans, however, want to withdraw the money, saying it will bankroll an army of 87,000 auditors who will harass middle-class taxpayers instead of helping them – claims that are often alarming and misleading.
Another benefit of the agency is that IRS officials exercise direct hiring authority over the latest additions. 5,000 customer service representatives who is trained in taxpayer rights and technical account management issues.
“We haven’t been able to provide the help that IRS employees want to be provided and that the nation’s taxpayers deserve,” Commissioner Chuck Rettig said during the October hiring announcement, “but help is on the way. for the taxpayers.”
Shortly after getting the new money, Treasury Secretary Janet Yellen ordered the IRS to come up with a plan within six months outlining how the tax agency would improve technology, customer service and processes. hiring.
That report is due in the coming weeks.
Looking ahead to the 2023 filing season, Collins’ report says the IRS will start out “in better shape than the last two years.”
Deputy Treasury Secretary Wally Adeyemo said in a statement that the additional resources “will enable the IRS to provide better service this filing season so that taxpayers can get issues resolved and respond to calls to phone” so they have the information “they need to file an accurate return.”
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