The IRS may wipe out its huge backlog of returns by the tip of the 12 months, IRS Commissioner Charles Rettig mentioned Thursday. His optimistic prognosis comes as thousands and thousands of persons are nonetheless ready for the overburdened company to course of returns from previous tax submitting seasons and ship their refunds, even because the IRS entered a brand new tax submitting season.
The IRS nonetheless had 23 million gadgets in its backlog to get by means of heading into this 12 months’s tax submitting season, because it struggled to beat hurdles exacerbated by the coronavirus pandemic. Earlier this 12 months, the Taxpayer Advocate wrote in her report the IRS was in a disaster. Treasury and IRS officers warned this could possibly be essentially the most difficult tax submitting season for taxpayers and preparers to this point.
Rettig appeared earlier than the Home Methods and Means committee Thursday for a listening to on the tax submitting season. He mentioned the company will “completely” make it by means of the backlog earlier than the tip of 2022.
“If the world stays as it’s as of at the moment, we might be what we name wholesome by the tip of calendar 12 months ’22, and enter the ’23 submitting season with regular inventories — wholesome by means of the eyes of the taxpayer,” Rettig mentioned.
The Treasury Division and IRS introduced final week a plan to atone for the pandemic-related backlog this 12 months. The hassle contains the hiring of 10,000 IRS workers over the following 12 months, together with 5,000 within the subsequent few months. The IRS has additionally been granted extra hiring authority, permitting the company to get new workers within the door extra rapidly. Beforehand, the onboarding course of took as many as six to eight months, Rettig mentioned, however with their new skills, workers could possibly be onboarded in 30 to 35 days.
The company already has an 800-person surge group of skilled IRS workers who since final month have been working by means of amended returns and different taxpayer correspondence within the backlog. One other 700-person surge group can be being assembled to assist course of unique returns.
When the coronavirus pandemic hit in spring 2020, the IRS shut down its processing facilities in the midst of tax submitting season. Whereas facilities reopened in June, the company was left with greater than 23 million items of unopened mail to get by means of that July. The IRS is able to opening 1 million to 1.5 million items of mail per week and needed to struggle by means of that backlog. The scenario snowballed.
The IRS additionally needed to fulfill further duties, resembling delivering stimulus checks and advance tax little one credit score funds to thousands and thousands of People in the course of the pandemic. The company has delivered greater than $1.5 trillion in aid because the pandemic started.
However the main problem the IRS continues to face in tax submitting season, in keeping with the company, is paper returns — which includes the tedious strategy of bodily coming into the knowledge into their methods.
“The difficulty for the Inside Income Service has all the time been paper, pre-pandemic and in the course of the pandemic,” Rettig mentioned.
Heading into this 12 months’s tax submitting season, the IRS has been encouraging everybody able to submitting returns electronically to take action, and emphasizing the significance of accuracy. The company maintains those that file correct returns electronically ought to obtain refunds inside 21 days.
For the 2022 tax submitting season, the IRS has acquired greater than 63 million particular person tax returns by means of March 11 and has issued greater than 45 million refunds totaling greater than $151 billion. The tax submitting season runs by means of Monday, April 18.
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