The Internal Revenue Service is in a state of “crisis” with 2022 tax submitting season only a few weeks away, a authorities watchdog warned in an annual report back to Congress this week.
National Taxpayer Advocate Erin M. Collins mentioned the general public could face “even longer delays” than it did final year because the IRS scrambles to handle a backlog of tax returns.
“While my report focuses primarily on the problems of 2021, I am deeply concerned about the upcoming filing season,” Collins mentioned in a press launch. “Paper is the IRS’s kryptonite, and the agency is still buried in it.”
The IRS will start accepting this year’s wave of particular person tax filings on Jan. 24.
The company nonetheless had a backlog of greater than six million unprocessed particular person tax returns and a couple of.8 million business returns as of mid-December, in response to the National Taxpayer Advocate’s annual report. Collins famous a number of the unprocessed returns “contain COVID-19-related relief that Congress provided taxpayers over a year ago.”
Several components have contributed to the IRS backlog, together with issues associated to the COVID-19 pandemic, inadequate budgets and staffing and up to date legislative adjustments, the report mentioned.
Tax returns will likely be additional sophisticated this year by the inclusion of month-to-month youngster tax credit score funds and lingering stimulus funds from final year.
“Thus, the unprecedented processing and refund delays taxpayers experienced in 2021 could be as bad, and potentially worse, in 2022 if taxpayers do not file electronically or do not properly reconcile their monthly Advance Child Tax Credit payments or the third stimulus payment with their 2021 returns,” the report added.
The National Taxpayer Advocate is head of the Taxpayer Advocate Service, an impartial entity throughout the IRS. The service’s web site notes it’s “here to ensure that every taxpayer is treated fairly and that you know and understand your rights.”
The watchdog’s dire forecast adopted an identical warning from IRS Commissioner Chuck Rettig, who cautioned that taxpayers could be in for a irritating expertise this submitting season.
“In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me,” Rettig mentioned in an announcement. “IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us.”
The IRS has set a submitting deadline of April 18 for many taxpayers. The company is encouraging the general public to file electronically and allow direct deposit to obtain their returns in a well timed method.