IRS continues to grapple with backlogs and identity theft issues despite increased funding, watchdog reports

Improvements Needed in IRS Tax Processing and Customer Service

Introduction

The Internal Revenue Service (IRS) is facing challenges in processing amended tax returns, answering taxpayer phone calls, and resolving identity theft cases, according to an independent watchdog within the agency. Despite increased funding, the IRS needs to address these issues to enhance its services to taxpayers.

Funding Boost and Criticisms

The IRS received a significant boost in funding through the Democrats’ Inflation Reduction Act. However, the annual report to Congress from Erin M. Collins, the leader of the organization responsible for protecting taxpayers’ rights under the Taxpayer Bill of Rights, highlights the need for continued improvements. Critics argue that the IRS is an over-zealous enforcer of the tax code and are attempting to reclaim some of the funding.

Delays in Resolving Identity Theft Cases

The IRS is experiencing extraordinary delays in assisting identity theft victims, taking nearly 19 months to resolve self-reported cases. This delay is concerning as it worsens financial hardships for taxpayers awaiting refunds.

Backlog of Amended Returns and Correspondence Cases

The backlog of unprocessed amended returns has quadrupled from 500,000 in 2019 to 1.9 million in October of the previous year. Additionally, the number of taxpayer correspondence cases has more than doubled over the same period, from 1.9 million to 4.3 million.

Inaccurate Phone Call Answer Rates

The report reveals that the IRS claimed to answer 85% of all calls received, but in reality, employees only answered 35% of calls. This percentage does not include calls where the taxpayer hangs up before being placed into a calling queue.

Training for New Employees

While the IRS has been hiring thousands of workers since 2022, the report emphasizes the need for proper training for these new employees. The 2023 Federal Employee Viewpoint Survey indicates that a quarter of IRS employees do not feel adequately trained to perform their jobs well.

IRS Commissioner’s Response

In response to the report, IRS Commissioner Daniel Werfel acknowledges the importance of making improvements based on the issues raised. He emphasizes that adequate resources are crucial for addressing these concerns and highlights the significance of Inflation Reduction Act funding and annual appropriations.

Controversial Funding History

The IRS has faced political controversy regarding additional funding since 2013, when it was found to have scrutinized political groups applying for tax-exempt status. The Treasury Department’s internal watchdog report revealed that both conservative and liberal groups underwent close review.

Conclusion

The IRS must prioritize reducing its paper processing backlog and improving taxpayer services. As the 2024 filing season approaches, the agency aims to enhance customer service and technological options, with most refunds expected to be issued within 21 days. The IRS has been working to overcome decades of underfunding and is investing in new technology and hiring more customer service representatives to improve operations.

Source: Associated Press

Read More of this Story at wtop.com – 2024-01-10 15:09:51