(((CBS Boston) — This year was a busy year for the Internal Revenue Service (IRS). According to the June 30 report National taxpayer advocate Agency Erin Collins has completed 136 million tax returns, distributed two more stimulus checks, revised unemployment insurance rules, and prepared for the start of prepaid child tax deductions (afterwards). Started). The IRS achieved all of this at a time when it was desired to be the last part of the pandemic. After that, a 10-year reduction in personnel and funds was carried out. However, their efforts to survive what Collins described as a “perfect storm” were a bit inadequate. The report points out that more than 35 million tax returns (about two-thirds of which are refundable) remain unprocessed or are at one of various stages of processing. The agency has certainly reduced that number. However, millions of tax refunds are still pending.
“The IRS and its employees deserve a great deal of credit for what they have achieved in very difficult situations, but there is always room for improvement,” Collins wrote in her report.
“This year, the IRS is processing an unprecedented number of returns that require manual reviews, delaying the issuance of refunds,” continued Collins. “These processing backlogs are very important because most taxpayers are entitled to overpay taxes by wage withholding or estimated tax payment during the year and get a refund at the time of filing. The government uses the tax system to distribute other economic benefits. “
At the time of the report, 35 million pending returns accounted for 20% of the total returns submitted. And the past May 17 federal tax deadline was the time for reporting, and the IRS far exceeded its goal of processing returns in 21 days. Various reasons are responsible for the ongoing delay.
Start from behind
Many of the factors that contribute to the backlog are primarily beyond the control of the IRS.The agency has entered the latest tax season with millions of people Pending tax filing From before 2019. Like most office workers, many IRS employees had to work from home for most of the pandemic. I didn’t have access to the returned paper that was sitting on the trailer waiting to be processed. They could only work on these when the workers returned to the office.
Pandemic-related tax law changes were also passed just weeks before the tax season. The 2021 Consolidated Expenditure Act, which includes a $ 900 billion second stimulus package, includes a “lookback rule.” This allows filers eligible for an earned income tax credit (EITC) or an additional child tax credit (ACTC) to use their 2019 income to calculate the appropriate amount of income for 2020. The IRS didn’t have enough time to change forms or adjust the computer system. As a result, millions of forms have to be processed manually through the error resolution system.
Mismatches with rebate collection credits have also been set aside for manual processing. This is a credit that people can claim if they are not eligible to receive it on the first or second stimulus check. At one point, the Treasury Department’s Treasury Inspector reported that about one-third of those who requested refund collection credits flagged the form for review.
Other reasons for backlog
Since its inception in 2021, the IRS has issued payments for the second and third economic impacts, commonly known as stimulus checks. The second was launched at the end of December 2020 for up to $ 600 as part of the Coronavirus Response and Relief Supplementary Budget Act. The third, up to $ 1,400, began going out in mid-March as part of the American Rescue Planning Act. The IRS began accepting tax returns on February 12. As a result, the latest checks were processed during the tax season, which is the busiest time of the year.
Another important element of the American Rescue Plan is the updated child tax credit. Starting July 15, the IRS will pay parents of children up to the age of 5 $ 3,600 per child. Half will be paid for 6 months and the other half will be offered as a 2021 tax credit. That’s $ 300 a month and an additional $ 1,800 when taxed. For parents aged 6 to 17, the total amount will change to $ 3,000 per child, or $ 250 per month, or $ 1,500 at tax. The IRS has also launched this new program of monthly child tax credit payments during the tax season. The agency currently sends three stimulating checks, but has never sent millions of regular payments. Resources dedicated to configuring this program are resources that are not dedicated to that program. Core missionIt is “to provide the highest quality of service by helping US taxpayers understand and fulfill their tax responsibilities and enforce the law in good faith and fairness to all.”
Americans have not received that “highest quality service” this year. The low-level service was launched online and extended to face-to-face telephone interactions.
Due to delays throughout the country, people turned to the IRS Where are the refunds A tool for finding information about pending refunds. (In the 2021 filing season, the IRS processed 96 million refunds worth a total of $ 270 billion.) This tool can notify taxpayers that a filing has been received, approved, or submitted. No details are provided regarding what the refund is pending, any additional information required for processing, or when it will be issued. Its lack of transparency inevitably forces people to call.
Taxpayers seeking information and guidance turned to the agency’s toll-free telephone lines. And the number of people inquiring was amazing. The IRS received 167 million calls during the 2021 tax season. That’s almost four times the number we received during the 2018 tax season. At its peak, there were 1,500 calls per second. Not surprisingly, the level of service has dropped dramatically. Only 9 percent of callers seeking tax assistance contacted those who could provide it. Calls to the 1040 support line only reached people who were alive 3 percent at the time
Overwork and lack of funds
The Collins report also cites limited resource and technical issues as a reason for the delay in processing tax returns. The agency operated under many of the same restrictions that affected office workers around the world during the pandemic.It is included Remote work, May reduce efficiency. The IRS is also short of staff and funding. Parliament has been continuously cutting government budgets over the last decade, reducing both funding and total employment by about 20 percent.
The IRS Watchdog has informed Congress that budget cuts will limit the ability of institutions to keep up with technology and collect taxes.Agencies have long relied on an older programming language called COBOL.. This is not necessarily a problem unless the code is kept up to date. And the IRS doesn’t keep it up to date. Therefore, when stimulus checks or tax law changes are made, the agency must find and pay the programmer to solve the problem. IRS has started Modernization efforts In 2019, but it depended on future funding. The funding has not yet been realized. As a possible example of the impact, according to the report, “42% of printers and copiers with IRS submission processing were unavailable or broken.” President Biden also Institutional funding It will increase by $ 80 billion over the next 10 years. The budget grows at a rate of 10% per year and the workforce grows at a rate of 15% per year.
Starting the tax season at a disadvantage resulted in a backlog of 35 million returns. Imposing a stimulus check and an updated child tax credit on the IRS at the same time deprived the IRS of resources from processing tax returns. And the history of staff and funding has led them to failure. All of this put a strain on Americans who were hoping for a timely refund. The tension continues.
“The historically large number of IRS returns that require manual review is until most individual and many business taxpayers in this group do not receive timely refunds and the IRS finally processes the returns. It means you have to wait, “writes Collins. “For taxpayers who can afford to wait, the best advice is to be patient and give the IRS time to process the processing backlog, but especially for low-income taxpayers and small businesses operating in margins. Delayed refunds can impose significant financial difficulties. “
It was first published on Friday, July 2, 2021 at 3:39 pm EST.
Millions are still waiting for money as the IRS delay continues – CBS Pittsburgh
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