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IRS is ‘buried’ in paper, returns could be delayed: Advocate

(NewsNation Now) — Taxpayers may have difficulty with returns, reaching the Internal Revenue Service by phone and obtaining information from their “Where’s My Refund?” and “Where’s My Amended Return?” tools this upcoming tax season, the agency’s National Taxpayer Advocate Erin M. Collins warned in Thursday’s Senate Finance Committee hearing.

“Paper is the IRS’ kryptonite and the IRS is still buried in it. There is no doubt that paper processing remains the agency’s biggest challenge, and that will continue throughout 2022,” Collins said in her testimony. 


For context on how buried, according to the ranking member of the Senate Finance Committee, Sen. Mike Crapo, R-Idaho, there are nearly 24 million unprocessed tax returns from 2021. Additionally, the IRS is facing unprecedented call volume, as 1 in 10 Americans had difficulty getting someone on the line last year. And quality of the service’s equipment, which dates back to the 1960s, is an issue as well, according to reports. 

While Democrats and Republicans traded barbs about who is to blame, the issue, at its root, lies more with the IRS’ lack of resources in the face of mounting responsibilities.  

Between managing compliance with the Affordable Care Act, distributing monthly child tax credits, absorbing hiring shortages, and enduring inadequate equipment and poor work flow practices, the result is long wait times for taxpayers.

According to the IRS Inspector earlier this month, issues as simple as paper jams caused untimely check deposits, resulting in the agency losing out on an estimated $56 million last year. Some refunds were held up to 10 months. That same report found that fixing the issues at the heart of the matter could cost less than $1 million. In the absence of those upgrades, this year’s filings could be much worse.

As a solution, the IRS says it’s implementing an all-hands-on-deck surge strategy to process backlogged returns faster and advocating for longer-term fixes from Congress, including more money for staffing and beefed-up enforcement to catch tax cheats.

As the IRS tries to dig out of this hole, some are resorting to a private company that lets callers skip to the front of the customer service phone line. Lawmakers want the IRS to investigate that company, enQ. “No taxpayers should have to fork over $1,000 to a private company to get their phone calls answered by the IRS. It’s maddening,” Senate Finance Committee Chairman Ron Wyden, D-Ore., told the Associated Press.

Taxpayers who want their refunds on time should heed the IRS’ warning and file early, file electronically, request a direct deposit, and make sure there are no errors.