Years of Neglect have Caused Chaotic Consequences for the IRS
The Internal Revenue Service (IRS) geared up for the start of tax filing season this past January, and officials are warning taxpayers and tax professionals that the agency is facing “enormous challenges” due to a number of less-than-ideal conditions.
As of December 31st, 2021, the agency had more than 6 million unprocessed individual returns and are currently still dealing with backups in processing returns from the past two filing seasons. As a result, teams of clerks have been working overnight shifts at the IRS processing center in Kansas City, MI, in efforts to clear the significant backlog. Unfortunately, the agency has been dealing with scanners sputter, forcing workers to enter data by hand while piles of tax documents overflow the carts.
These subpar conditions have been defined as “chaotic” by a number of workers and officials, reflecting the strain of problems caused by a continuous political and logistical conflicts. American Democrats argue that the long-lasting uproar is proof that the agency needs more funding, while the Republican party argues that the current conditions reveal that the IRS should not be given more money or responsibility.
However, the substantial budget cuts over the years can be linked to a large majority of the agency’s ongoing problems today. Along with staffing shortages and outdated technology systems, the continuous effects of the COVID-19 pandemic have kept much of the IRS workforce at home while the agency has spent endless hours sending stimulus checks and other forms of economic relief to millions of Americans across the country.
As of today, the IRS has approximately 75,000 workers, which is the same size as it was in 1970. In addition, the number of American taxpayers has increased by 7% and the tax code has grown more complex. With the federal government having to combat large corporations using tax avoidance strategies, along with the recent rise in cryptocurrency, there are numerous transactions that have become much more difficult to tax.
While the current agency conditions are extremely unsettling for the workforce, taxpayers, and tax professionals alike, officials are preparing to take the proper steps that will hopefully begin to mend the damage that has progressed over a number of years.
In efforts to speed up the backlog of returns, the agency has secured hiring authority from the United States Office of Personnel Management to fill 10,000 positions. Furthermore, the IRS received funding of more than $1 billion as part of Present Biden’s pandemic relief legislation that Congress passed last year to contribute to improving taxpayer services.
We understand that many businesses, families and individuals may be overwhelmed about another difficult tax season. At Brock CPA, our tax and accounting experts are here to assist you with any questions or concerns you may have. If you are facing difficulties or uncertainty about your tax refunds, please do not hesitate to contact our office at 904-330-0268 or dbrock@brockcpa.com
