Trying to get through to the Internal Revenue Service on the phone? You probably won’t, because only about 10% of calls were answered by an IRS employee during the 2022 tax filing season.
That’s just part of the agony taxpayers have encountered this year, said National Taxpayer Advocate Erin Collins in her mid-year report to Congress. She cited lengthy delays in processing paper returns, consumers waiting months to get responses when the IRS makes adjustments to returns, and more.
“The IRS has said it is aiming to crush the backlogged inventory this year, and I hope it succeeds,” Collins said. “Unfortunately, at this point the backlog is still crushing the IRS, its employees, and most importantly, taxpayers. “
Jason Russell, a certified public accountant and owner of Russell CPAs in Sacramento, said that CPAs, enrolled agents and attorneys have a special tax practitioner hotline where they are slightly more likely to connect with the IRS.
But even with that, he said, it takes several hours on hold. About half the time, the system will say there are too many calls and hang up.
Russell said, before COVID, it would take six months to get a response from the tax agency about return inquiries, but now it can take up to eight to 12 months.
Time for processing paper and digital returns and refunds went up, too.
“Pre-COVID, we would always say it was about six to eight weeks. Post-COVID, we’re saying six to eight months,” he said.
And not only are returns processing slower, so are some electronic payments. Russell said dozens of his clients received letters from the IRS stating that they owed taxes for their 2021 return, despite having already paid because the agency didn’t check its system.
This happened to Russell, too – the IRS also demanded he pay interest in penalties, even though he had a confirmation number for his payment and the money was taken from his bank account, he said.
The IRS disputed the grim picture Collins’ report painted, citing what it called “unprecedented actions taken by the agency, and these intensive efforts to help taxpayers will continue in the months ahead.”
It said the tax process data in the report “are neither the most accurate nor most recent figures. Today, the IRS is running ahead of tax return processing compared to a year ago.”
The IRS cited significant new hiring and training, as well as shifting existing staff, working with new independent contractors and providing mandatory overtime for workers.
But, Collins’ report said, “In making its commitment to achieve ‘healthy’ inventory levels by year end, the IRS did not define how it will measure ‘healthy.’’’’
The advocate’s office in an independent watchdog that reviews IRS procedures and recommends improvements. It noted that problems it outlined have mushroomed since the COVID-19 pandemic began more than two years ago.
Tax return delays
The pandemic forced the IRS to temporarily close processing facilities for health reasons, and the agency then fell behind in its work.
“Over the last two years, IRS inventories snowballed into unprecedented delays and challenges, and the IRS is still struggling to catch up,” the report said.
The problems were compounded as the IRS was directed by Congress to manage the COVID-triggered stimulus payments and child care tax credit programs.
Still, the report said, while “these challenges are a few of the reasons that taxpayers are waiting unusually long for their refunds,” and that’s understandable, “it is not acceptable for such unreasonable delays in taxpayers’ refunds.”
The report did offer some good news. It estimated that more than 85% of individual taxpayers e-filed their federal income tax returns and either got the refunds claimed or paid their balance due without any issues.
IRS said that by the end of May, it had received 145 million returns and sent refunds to 96 million taxpayers.
Trouble on the phone
But for many who needed help, or whose tax filing generated questions, the report said the experience was often less smooth. For example:
▪ Telephone service. Requests for personal help ballooned during the pandemic, as people raised questions not only about taxes, but the new federal relief programs.
IRS has said it is continuing to upgrade its callback system.
IRS received 73 million calls during the 2022 filing season, defined as between Jan. 24, when the agency began accepting 2021 returns, through April 18, the tax filing deadline. It answered about 10% of the calls.
“The IRS’s telephone service has continued to be unacceptably poor,” the report said.
▪ Slow processing of paper returns. About 17 million taxpayers filed returns using paper.
“Without sufficient staffing and an automated system to process paper-filed returns, the IRS will continue to encounter delays in the filing season and beyond,” the report said.
The paper processing problem was obvious more than a year ago, and “the IRS could have addressed them more aggressively at that time,” Collins said.
“Had the IRS taken steps a year ago to reassign current employees to processing functions, it could have reduced the inventory backlog carried into this filing season and accelerated the payment of refunds to millions of taxpayers,” she said.
▪ Correspondence delays. You get a notice in the mail from the IRS. You respond. As of May 21, IRS processed 5 million responses to proposed adjustments on a tax return.
The report found it took the agency an average of 251 days — more than eight months — to respond. Three years ago, it took 74 days.
The current backups, the report said, may mean “that the taxpayer must wait well over a year to get the issue resolved and receive the refund due.”
The report recommended a maximum 45-day response time. IRS said it only partially agreed, explaining the response times depend upon factors such as legislative-mandated changes and workloads during peak periods.
This story was originally published June 27, 2022 2:05 PM.