In addition to increased pandemic responsibilities, understaffing, and underfunding, the agency is dealing with an unprecedented backlog of unprocessed tax returns. As a result, there is a significant backlog of processing tax returns, many of which belong to Americans waiting for refund checks.
A photo of the cafeteria at the IRS’s Austin site was shared on Twitter by Natasha Sarin, a Treasury Department tax policy and implementation consultant. The space is “overrun” with employees’ paper returns.
In a statement to Insider, Sarin added, “There’s little doubt that purposefully starving the IRS of resources shortchanges American taxpayers.” “Dedicated IRS personnel are labouring to clear the massive paper backlog using nearly antiquated equipment and manpower levels from the 1970s. It’s past time to provide the long-term resources that a modernised IRS can rely on for all Americans.”
According to a report published in 2021 by national taxpayer advocate Erin Collins, the IRS’s watchdog, IRS employees must physically transcribe data from paper returns, which means they must type in all of the information included in those stacks of returns.
“Manually entering data from so many paper returns is a significant work,” Collins said in her report, “and transcription errors are common, particularly on longer returns.”
IRS employees use antiquated technologies as well. Some of the return processing systems they utilise date from the 1960s. Shawn Gunn, a tax inspector at the IRS’s Kansas City location, previously told Insider that the computers are “simply old” and look like those in the movie “Hackers,” with their dark green screens and white writing. Gunn had firsthand contact with the massive amount of paper, describing hallways and walkways crammed with carts full of it.
The IRS’s diminishing resources and employees have resulted in a backlog and obsolete technology. According to the Tax Policy Center, the agency’s funding has decreased by more than 20% over the last decade. The workforce, on the other hand, has shrunk by 17%. Collins, the taxpayer advocate, estimates that the workload has increased by 19% over the same period, as measured by the number of returns filed.
The IRS has around 4.5 million paper tax returns awaiting processing, according to the Treasury Inspector General for Tax Administration, as of the week of March 12, 2022.
Some taxpayers have had to wait months for their refund checks due to processing delays. Some Americans are unable to afford childcare, groceries, or even their houses because they do not receive these checks.
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“Without long-term, predictable funding, the IRS will continue to face severe limitations, unable to provide the service taxpayers deserve and need,” IRS Commissioner Charles Rettig wrote in a Yahoo! Money op-ed, calling refund and customer service delays “frustrating” for both taxpayers and the IRS.
According to the Treasury Department, increased money for the IRS could greatly improve filing efficiency. Sarin examined what an “adequately funded tax administrator” may entail for taxpayers in a blog post, pointing out that filing taxes in other nations is free and simple. To confirm their filing in Sweden, for example, many taxpayers just reply “yes” to a text.