The last weekend for Americans to submit their taxes prior to the April 15th due date has actually come and gone, but the Internal Revenue Service still has a significant number of individual and business filings in their backlog. IRS Commissioner Charles Rettig affirmed before Congress in March, guaranteeing to clear through the 20 million unprocessed 2021 income tax returns by the end of 2022. He mentioned a variety of factors for the stockpile, consisting of “new responsibilities,” hold-ups in modernization, and unpredictability about funding that decreases hiring.
“When we are confronted with long-term Continuing Resolutions (CRs), we typically freeze nearly all external hiring,” he said. “We take this action to ensure we have funds to pay all employees, including any applicable pay raises. Last fall, we increased staffing in our Wage & Investment Division (W&I) despite the CR, hiring at risk without the funding in place to support these positions, but assuming future resources would be provided by the eventual enactment of the FY2022 appropriation, to help address our inventory.”
Observers state Joe Biden’s trillions of dollars in social spending put through Congress overwhelmed the IRS in 2021. The firm was entrusted with dispersing and tracking much of the cash, such as the stimulus payments and the regular monthly child tax credit to qualifying households.
“The problems the IRS is having primarily stems from Congress putting the responsibilities for distributing pandemic-era social programs on an agency that’s supposed to exist for revenue collection, not benefit administration,” said Alex Muresianu, a tax expert at the Tax Foundation. “The effects of that disconnect only got worse during the pandemic: the various relief measures (CARES, the appropriations law in early 2020, ARP) increased the IRS’s administrative responsibilities enormously, making them responsible for distributing hundreds of billions of additional dollars.
“And while they did receive a budget increase to try and make that process smoother, it’s tough to upgrade their capacity that quickly,” he added.
Rettig’s statement appeared to support this concept at a minimum in part with a number of recommendations for the increased workload for the federal agency.
“We continue to balance multiple unprecedented demands, including starting the filing season as well as continuing to work on important new tax provisions,” Rettig said. “And we remain focused on numerous taxpayer-related issues and have pursued innovative ideas and processes not previously deployed by the IRS in an effort to make improvements to the current inventory and provide meaningful taxpayer services. The reality at the IRS is that we know we need to do better; we’re committed to doing better, and we are trending in a positive direction.”
Republican politicians have blasted the Biden administration for these backlogs, stating they should have been remedied by now. Republican politicians on the House Oversight Committee sent out a letter to the IRS pointing out that “COVID-19 related telework policies” enabled most IRS staff members to work from another location in addition to out-of-date software applications.
“For many Americans, their tax refund can equal six weeks of take-home income,” the letter said. “The volume of tax returns and refunds completed each year shows the far-reaching impact that processing delays could have for the average American. Processed returns are also essential for those who may be entitled to apply for other government benefits such as loans administered by the U.S. Small Business Administration. It is therefore imperative that the IRS take steps to mitigate any processing delays, which can delay refunds and access to economic relief programs.”
The IRS provided an “urgent reminder” at the start of this year informing Americans to submit digitally “to help speed refunds” this year. Rettig released an op-ed in Yahoo News last month echoing that tone.
“As the IRS begins this tax season, it continues to face enormous challenges. Our dedicated workforce has done everything it can to prepare for filing day on April 18,” he wrote. “Today, millions of people are still waiting for prior years’ returns to be processed, and refund checks to arrive in the mail, while preparing for their upcoming tax filing. While we can’t immediately solve these significant issues, our employees are doing everything they can, and I am committed to returning to normal inventory levels before next year.”
H/T The Epoch Times