The IRS remained well behind the ball entering this year’s filing season, which started Jan. But those extra obligations diverted some technical processing and management resources. Thousands of businesses are in the same boat, including some who are still awaiting emergency pandemic-related economic aid approved in March 2021 in President Joe Biden’s American Rescue Plan legislation.Īmid those struggles, Congress heaped a range of extra responsibilities on the IRS to help deliver pandemic relief, well beyond the agency’s core revenue collection mission.Įverson said the agency capably distributed pandemic relief like stimulus payments and monthly Child Tax Credit payments. But in many cases, refunds due in 2021 haven’t been issued yet because returns filed last year haven’t been fully processed. In a typical year, more than three-quarters of individual and household filers get refunds that average more than $2,000. How we got here: At the onset of the pandemic in March 2020, the IRS temporarily shut down its offices and processing sites - causing disruptions in a workflow that has yet to return to normal. “At this time, we need more clarity into which additional notices the IRS plans to suspend as well as those it does not have the authority to suspend so that Congress can work with the Department of Treasury to provide further relief where needed.”Įven deficit hawks are calling for an infusion of money for the agency to deal with its near-term problems, though congressional Republicans have shown little willingness to go along. “While this was welcome news, there is a continued risk that low- and middle-income filers will receive confusing notices while they wait for IRS to process their correspondence or returns,” said Rep. But the agency has resisted calls for bolder action like suspension of fines. They jawboned the IRS into cutting the number of automated collection letters being sent to taxpayers, often in error. Taxpayers caught up in the bureaucratic mess have faced roadblocks for mortgage applications and other types of consumer borrowing like car and college loans, tax preparers say, since lenders often require borrowers to submit their latest tax returns to prove their incomes and job status.Īs many taxpayers take a hit to their pocketbooks and others worry about what awaits them this filing season, scores of lawmakers are badgering the IRS on behalf of constituents they’ve been hearing from for almost two years.
Veteran IRS workers have been reassigned to mail duty and the agency is about to go on a hiring binge to reduce the backlog. Millions of taxpayers are still awaiting refunds from last year, part of a paperwork pileup that the agency is struggling to get a handle on. “Then you have the pandemic itself, and what happened is they went down early and they went down hard, and they haven’t come back,” he said.
“They’re thinly strapped,” said former IRS commissioner Mark Everson.
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