The Inner Income Service’s bold plans to rent 10,000 extra workers over the following 12 months are going to be tough to achieve as a brand new report reveals that the IRS met solely 67% of its hiring objectives for final 12 months in a key space.
The report, launched Monday by the Treasury Inspector Basic for Tax Administration, reviewed the outcomes of the 2021 submitting season. It discovered that stock backlogs of unprocessed tax returns from the 2020 submitting season continued to have an effect on the IRS’s means to offer well timed service to taxpayers in the course of the 2021 submitting season.
“These backlogs will possible proceed into the 2022 submitting season until the IRS takes unprecedented steps to deal with them,” stated the report.
Final week, the IRS introduced plans to sort out its backlog of roughly 20 million unprocessed tax returns by hiring 5,000 workers within the coming months and 5,000 extra over the following 12 months (see story). To try this, the IRS can be holding job gala’s throughout the nation, together with upcoming ones for its processing facilities in Kansas Metropolis, Missouri; Austin, Texas; and Ogden, Utah. It has additionally been reassigning workers from different capabilities and including surge groups.
Final week, Congress additionally authorised a 6% funding enhance for the IRS, a lot of which can go towards taxpayer service, though the funding enhance is simply about half of what the Home had authorised final summer season (see story).
The IRS headquarters in Washington, D.C.
Andrew Harrer/Bloomberg
The TIGTA report discovered that the closure of a tax-processing-center in Fresno, California, final 12 months additional elevated backlogs on the tax-processing facilities in Kansas Metropolis, Missouri, and Ogden, Utah. However the IRS continues to face challenges in hiring enough workers. For instance, as of Might 18, 2021, the IRS had a hiring shortfall of 814 people it estimated have been wanted to fulfill demand within the Kansas Metropolis and Ogden tax processing facilities, in response to the report, and the IRS achieved just below 67% of the hiring aim for submission processing of tax returns.
Final month, the IRS reversed plans to shut its processing heart in Austin, Texas, to deal with the rising backlog (see story).
The TIGTA report additionally contained a lot of different findings about final tax season, together with the IRS’s processing of refundable tax credit for tax reduction in the course of the pandemic. It famous that the IRS carried out processes to permit taxpayers to elect to make use of prior-year earned earnings when claiming the Earned Earnings Tax Credit score (EITC) and the Extra Youngster Tax Credit score (ACTC) and located that the IRS accurately allowed credit for two.2 million EITC claims totaling greater than $7.6 billion. Nevertheless, TIGTA recognized 13,130 taxpayers who acquired greater than $20.5 million much less in EITCs and 900 taxpayers who acquired $485,415 extra in EITCs than they have been entitled to obtain. TIGTA additionally recognized 8,335 taxpayers who acquired $8.three million much less in ACTCs and 1,257 taxpayers who acquired $1.5 million extra in ACTCs than they have been entitled to obtain.
The report additionally checked out how the IRS dealt with stimulus funds final 12 months. As of Oct. 14, 2021, the IRS has issued greater than 13.5 million restoration funds totaling $6.three billion for taxpayers who claimed unemployment compensation. TIGTA’s evaluate of 8.three million of the 13.5 million restoration funds discovered the funds have been correct.
The IRS additionally continued to face challenges answering the telephones. As of Might 28, 2021, taxpayers made 185 million whole makes an attempt to contact the IRS by calling the varied customer support toll-free phone help traces. The IRS answered 25.6 million calls with automation, whereas IRS workers answered greater than 11.four million calls, offering a 15.5% degree of service with a 19-minute common velocity of answering the calls. Final week, the IRS and the Treasury stated they have been including 2,000 contractors to answer taxpayer calls about Financial Affect Funds and Youngster Tax Credit and expanded buyer callback providers to 70% of the IRS’s toll-free traces. The IRS can also be going so as to add automated chatbots to assist taxpayers reply their questions on-line and by cellphone.
Within the report, TIGTA made 10 suggestions to the IRS to take actions to appropriate returns TIGTA recognized as probably misguided, to make sure that relevant pc programming modifications are requested and carried out, and to judge the necessity for the present Id Safety Private Identification Quantity course of in submission processing. The IRS agreed with all 10 of TIGTA suggestions.
“The backlog of unprocessed prior-year Type 1040 household returns affected the submitting of digital returns for the 2021 submitting season and also will have an effect on submitting season 2022,” wrote Kenneth Corbin, commissioner of the IRS Wage and Funding Division and chief taxpayer expertise officer in response to the report, who additionally addressed one other glitch revealed within the report. “For safety functions, a taxpayer submitting a self-prepared return with no private identification quantity (PIN) is required to enter their prior-year adjusted gross earnings for a return to be accepted. Digital Submitting Providers has labored with exterior trade companions and inner communication specialists to alert taxpayers of procedures to take when this happens. Taxpayers can file electronically in the event that they observe the revealed steering positioned on IRS.gov.”