February 14, 2022 - Douglas Myser

IRS addressing backlog of returns. Multiple estimates from various sources have said that the Internal Revenue Service has between twelve and seven million unprocessed tax returns from last year, as they head into the 2022 tax season. The reasons are multiple. Congress has scaled back the IRS budget over the last decade, then add to that two Presidents who changed tax codes, that the IRS had to address, and to top it off, administering the Stimulus Checks during the Covid crisis. When you add it up, it means Congress and the Biden Administration are finally realizing a problem exists, and are planning a major increase in the number of IRS employees. IRS addressing backlog of returns.

Collins, of the Taxpayer Advocate Service, stated that "It ahs been a very painful period of time , very frustrating, very hard for taxpayers," "They can't get through to the IRS through phones, their paper correspondence have been piling up, so it's very difficult for them to figure out what is going on." The IRS computers are the oldest major tech systems in the Federal Government, and are being overhauled, but it is a major undergoing, and doing it during Covid and while the IRS is under this sort of strain is crating difficulties in the transition.

Collin said that the IRS budget has fallen about 20% in the last decade while the number of tax returns has gone up by 13%. At the same time the IRS workload has increased. The IRS was put in charge of the Covid assistance payments to eligible Americans as well as the expanded child tax credit. The Biden Administration's Build Back Better Act would have provided $80 billion for the agency over the next 10 years. When the bill was defeated, several Congress people looked for a separate stand alone bill to fund the agency. Given that the deficit could be brought down nearly $1 trillion per year, with the amount of unpaid taxes, it seems the Congress will eventually get this through.