Last month, we talked about the Taxpayer Bill of Rights (TBOR). This month, we will look at another consumer resource, the National Taxpayer Advocate, and the recent fiscal year Objectives Report to Congress.
In late June, Erin Collins, the National Taxpayer Advocate delivered her fiscal year 2023 report to Congress. The report reflects on objectives offered last year and provides insight into current conditions at the Internal Revenue Service (IRS).
Some of the points made by Ms. Collins include:
- The 2022 tax season has gone relatively well. The IRS reports it received 139 million individual tax returns by the filing deadline and had sent refunds to 89 million taxpayers—or about 64 percent. By May, those receiving refunds rose to 66 percent.
- The IRS improved its processing time on returns tagged due to differences in figures on tax returns compared to IRS documents. This type of discrepancy is a flag for tax fraud. Returns with these disparities are sent to the Error Resolution System (ERS). The IRS has taken steps like alerting taxpayers of the discrepancies and asking them to update their records on their IRS online accounts. Overall action on this issue will hopefully reduce processing time for flagged returns. Differences between figures reported on W-2s and FATCA forms can trigger an IRS audit or worse, a criminal tax investigation.
- Automation added to the review of returns claiming Recovery Rebate and Advance Child Tax Credits significantly improved the processing time of these returns compared to 2021.
- The Taxpayer Advocate faults the IRS for delayed use of relief funds the agency could have used to more quickly staff up, reorganize staff, and make processing and tech changes to reduce its backlog. Ms. Collins notes, “That the backlog continues to grow is deeply concerning, primarily because millions of taxpayers have been waiting six months or more to receive their refunds.”
- The report advises, “The IRS’s telephone service has continued to be unacceptably poor.” There were 167 million calls made to the IRS during the 2021 tax season. Only nine percent of those calls were answered, with an average wait time of 20 minutes. In 2022, despite the deep deficit experienced during the 2021 season, only ten percent of calls were answered with hold times of about 29 minutes. The Taxpayer Advocate reports the drop by approximately half the number of calls should indicate that twice the number of calls would have been answered in 2022. While phone personnel were used for processing returns in 2022, the report still notes nine out of ten calls do not reach an IRS agent.
The report is more extensive but drives home its point—more work is needed to modernize the technology, processes, and customer service capabilities of the IRS.
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