WASHINGTON — The backlog of tax returns on the Internal Revenue Service has grown to greater than 20 million within the final yr regardless of efforts by the Biden administration to course of filings and ship out refunds extra shortly, the national taxpayer advocate said in a report revealed on Wednesday.
The report provides a important evaluation of the Biden administration’s dealing with of the I.R.S., which has been burdened by staffing and funding shortages in recent times whereas taking up the duty of delivering financial reduction cash throughout the pandemic.
The tax company’s unbiased watchdog mentioned the I.R.S. was gradual to use reduction funds that it acquired as half of the $1.9 trillion stimulus bundle that Congress handed in March 2021. It mentioned the company ought to have moved extra shortly to ramp up hiring, reassign workers and make know-how modifications that would have eased the backlog.
“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,” Erin M. Collins, the nationwide taxpayer advocate, wrote within the report.
A yr in the past, the I.R.S. had 20 million unprocessed tax returns. That backlog had grown to 21.3 million as of the final week of May.
The I.R.S. disputed the taxpayer advocate’s findings and mentioned more moderen knowledge, by means of June 10, confirmed unprocessed returns had dipped beneath 20 million and had been down barely from June 2021.
“The I.R.S. is committed to having healthy inventories by the end of this year and continues to make strong progress handling unprocessed tax returns,” Jodie Reynolds, an I.R.S. consultant, mentioned in an announcement.
Paper tax returns proceed to lavatory down the I.R.S. because the paperwork should be manually transcribed into its antiquated pc techniques.
Communication can also be a serious impediment, Ms. Collins mentioned, with taxpayers looking for to attain customer support brokers on the phone ready on maintain for a mean of 29 minutes. Just 10 % of the 73 million calls that the I.R.S. acquired had been answered by an agent. On each counts, these metrics are worse than final yr.
The Biden administration has been calling for extra assets for the I.R.S. and requested for $80 billion over a decade to overhaul its know-how and bolster its workers. Democrats have pinned blame for the agency’s problems on Republicans, who’ve lengthy tried to starve it of funding and accused it of political bias in opposition to conservatives.
The Treasury Department, which oversees the I.R.S., mentioned on Tuesday that the agency expected to soon finish processing all particular person tax returns with out errors that had been acquired final yr, with enterprise returns filed in 2021 accomplished “shortly thereafter.” A senior Treasury official famous that the I.R.S. had already been stepping up hiring and had diverted workers to assist clear the backlog.
The I.R.S. has struggled to rent workers even when it has the funding to accomplish that. The report famous that the company had set a objective of hiring 5,473 individuals in its submission processing services this yr however had employed solely 2,056 thus far.
For taxpayers, the dysfunction on the I.R.S. has led to mounting frustration as they await refunds at a time of hovering inflation.
Ms. Collins estimated that 9 million taxpayers had been experiencing refund delays. More than 300,000 who’ve been victims of determine theft could have to wait at the very least a yr.
The taxpayer advocate urged that the I.R.S. work to automate the processing of paper tax returns and make it simpler for taxpayers to file electronically. Ensuring that telephones are answered must also be a precedence.
“If a private company failed to answer nine out of 10 customer calls, customers would go elsewhere,” Ms. Collins mentioned. “That, of course, is not an option for U.S. taxpayers, so it is critical that the I.R.S. increase staffing in its telephone call centers to handle the volume of calls it receives.”