Ohio legislators have joined the bipartisan push for the Internal Revenue Service (IRS) to provide relief to taxpayers impacted by backlogs at the agency.
Just three days after the 2022 tax season got underway, the agency suspended some of its automated mailings to decrease correspondence with taxpayers that would further slow the IRS as it tries to process returns from the previous tax season. With a correspondence backup of approximately 15 million pieces of mail, the IRS is falling further and further behind.
Since late last year, lawmakers in Ohio and others have urged Treasury Secretary Janet Yellen and the IRS to respond to the serious backlog described by Taxpayer Advocate Erin Collins in her Annual Report to Congress.
Just one issue is the automated penalty notices being churned out to taxpayers. The agency cannot respond in a timely matter to taxpayer queries. Because of these and other issues, the U.S. Senate and House, along with state representatives, sent correspondence to Secretary Yellen requesting the following actions:
- Process amended returns on an expedited basis and respond to congressional caseworkers and TAS staff who are assisting taxpayers with return-related issues
- Hit pause on automated IRS collections until at least 90 days following Tax Day on April 18, 2022
- Offer focused tax relief from penalties for taxpayers who paid at least 70 percent of the tax liability owing from tax years 2020 and 2021
- Clarify and streamline the penalty abatement process for those affected by the pandemic without requiring further correspondence from the taxpayer
Unprocessed returns have resulted in penalty notices and disrupted the ability of consumers to qualify for loans, mortgages, and other activities where a tax return is needed for verification of income or compliance. The current inability of the IRS to process returns or correspondence from the last tax season means taxpayers are receiving penalty notices for taxes they have already paid.
Charles Rettig, IRS Commissioner updated Congress in February noting, “The IRS pursued significant actions during the 2021 filing season to address the return and correspondence inventory. But, because the IRS lacked the resources it needed to reduce inventory to a healthy level, we are entering the filing season with a significant inventory of unprocessed returns and correspondence.”
In addition to mandatory overtime, the IRS is creating “surge teams” by temporarily reassigning 1,200 experienced employees to other areas of the agency to help handle the backlog. With approximately 5,000 positions to fill throughout the agency, only 179 have been filled. Roles related to processing returns pay approximately $25,000 per year, and don’t have much allure in today’s competitive job market.
The chronic underfunding of the IRS, coupled with pandemic-related overload, have made visible the enormous dysfunction of the agency assigned to collect the funds that keep the lights on and government running—as well as processing taxpayer refunds.
At present, there is no indication that Tax Day 2022 will be pushed back. If you can, file soon and file electronically.
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