WASHINGTON — The tax return backlog with the Internal Revenue Service has grown to more than 20 million in the past year, despite efforts by the Biden administration to process applications and send refunds more quickly, the national taxpayer said in a report released Wednesday. published. †
The report offers a critical assessment of how the Biden administration is dealing with the IRS, which has suffered from staffing and funding shortages in recent years, while assuming responsibility for providing money for economic aid during the pandemic.
The independent tax agency’s watchdog said the IRS has been slow to use aid funds it received as part of the $1.9 trillion stimulus package that Congress approved in March 2021. It said the agency should have intervened more quickly to ramp up hiring, reallocate workers and make technological changes that could have helped to clear the backlog.
“That the backlog continues to grow is very worrying, especially as millions of taxpayers have waited six months or more to receive their refunds,” Erin M. Collins, the state taxpayer’s attorney, wrote in the report.
A year ago, the IRS had 20 million unprocessed tax returns. That backlog has grown to 21.3 million since the last week of May.
The IRS disputed the taxpayer’s findings, saying more recent data, through June 10, showed unprocessed returns had fallen below 20 million and were slightly lower than in June 2021.
“The IRS aims to have healthy inventories in place by the end of this year and continues to make strong progress in handling unprocessed tax returns,” Jodie Reynolds, an IRS representative, said in a statement.
Paper tax returns continue to bog down the IRS as the documents have to be manually transcribed in the outdated computer systems.
Communication is also a major obstacle, Ms Collins said, with taxpayers seeking to reach customer service representatives spend an average of 29 minutes on hold. Only 10 percent of the 73 million calls the IRS received were answered by an agent. In both respects, those stats are worse than last year.
The Biden administration has pushed for more resources for the IRS, asking $80 billion over a decade to overhaul its technology and strengthen its workforce. Democrats have blamed Republicans for the agency’s problems, which have long tried to starve it of funding, and accused it of political bias toward conservatives.
The Treasury Department, which oversees the IRS, said Tuesday that the agency expected it to quickly process all individual tax returns received last year without errors, and to complete corporate returns filed in 2021 “shortly after.” goods. A senior Treasury Department official noted that the IRS had already hired more staff and diverted workers to clear the backlog.
The IRS struggles to hire staff, even if it has the funding to do so. The report noted that the agency had set a target of hiring 5,473 people at its submission processing facilities this year, but has only hired 2,056 so far.
For taxpayers, the failure of the IRS has led to mounting frustration as they wait for refunds at a time of rising inflation.
Ms Collins estimates that nine million taxpayers are delayed. More than 300,000 victims of identity theft have to wait at least a year.
The taxpayer attorney suggested that the IRS automate the processing of paper tax returns and make it easier for taxpayers to file electronically. Making sure phones are answered should also be a priority.
“If a private company didn’t answer 9 out of 10 customer calls, customers would go elsewhere,” said Ms. Collins. “Of course, that’s not an option for U.S. taxpayers, so it’s critical that the IRS increase the workforce at its telephone call centers to handle the volume of calls it receives.”