Botched stimulus payments. Millions of unprocessed tax returns. Now, an annual report from the National Taxpayer Advocate, Erin Collins, provides a concerning look at the current state of the IRS.
Of the 100 million phone calls made to the IRS’s toll-free phone lines in 2020, only one in four were answered. That leaves about 75 million calls unanswered or directed to automated responses.
This lapse in customer service has had real consequences for taxpayers. Without reliable communication, “taxpayers often did not understand what was happening with their tax returns, refunds, balances, or [stimulus payments],” Collins said.
How did the IRS let this happen?
Understaffed, Outdated, and Overwhelmed
The IRS’s problems start with its reliance on outdated paper systems. The agency needs a large, in-person staff to open mailed returns. As we’ve previously covered, the IRS’s shift to a remote workforce left the agency with millions of pieces of mail unopened. Without a larger in-person staff, the IRS simply can’t process the returns fast enough.
Collins’s report estimates that as of late 2020, the IRS still has 7.1 million individual returns and 2.3 million business returns left to process. And that’s just for the 2019 tax year.
With a new tax season approaching, 2021 is shaping up to potentially be another rough year for the IRS. In her report, Collins places the blame on the IRS’s lack of funding, lack of staffing, and reliance on paper systems.
“One overriding theme emerges,” Collins says, “the IRS needs more resources to hire employees and more resources to modernize its information technology (IT) systems.”
What Does This Mean for Taxpayers?
If you haven’t already switched to electronic filing and signed up for Direct Deposit, this is the year to do it. Even under normal circumstances, it’s much easier for the IRS to process your returns electronically.
This is the best way to ensure your tax refund is accurate, and arrives on-time. If you have any questions on how to e-file your returns and sign up for Direct Deposit, give us a call at 303-317-6111 and we’d be happy to help.
