I.R.S. to Start Tax Season With Major Backlog

The Biden administration is seeking an additional $80 billion over a decade for the I.R.S. to increase its staff, upgrade its technology and improve its enforcement and customer service capacity. That request is part of the administration’s Build Back Better Act, which is stalled in Congress.

“Additional resources are essential to helping our employees do more in 2022 — and beyond,” Charles P. Rettig, the I.R.S. commissioner, said in a statement on Monday.

Ms. Collins reiterated the agency’s recommendation that Congress provide it with enough money to do its job. Since 2010, the I.R.S.’s staffing is down 17 percent, according to the report. Its workload, measured by the number of individual returns, is up from 142 million in 2010 to 169 million last year — an increase of 19 percent.

Over the past two years, the agency has been charged with administering several pandemic-related programs, including three rounds of stimulus (totaling 478 million payments worth $812 billion) and $93 billion in advance payments for the expanded child tax credit to more than 36 million families.

“One irony of the past year is that, despite its challenges, the I.R.S. performed well under the circumstances,” Ms. Collins wrote.

As of late December, the I.R.S. had yet to finish processing six million original tax returns, 2.3 million amended returns, more than two million employer quarterly returns and five million pieces of taxpayer correspondence — with some submissions dating to April and with many taxpayers still waiting for refunds, according to the advocate’s report. In contrast, there are fewer than a million unaddressed returns in a more typical year, according to Treasury officials.

Even millions of returns filed electronically — which usually flow through the system more quickly — were suspended during processing because of discrepancies between the amounts claimed on returns and what the I.R.S. had on record.

Article source: https://www.nytimes.com/2022/01/12/business/irs-backlog-tax-returns-2021.html