IRS officials: Expect ‘challenges’ that may lead to delayed refunds

The Treasury Department is expecting “enormous challenges” for taxpayers and preparers in the upcoming tax filing season, The Washington Post is reporting.

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In a Monday phone call with reporters, Treasury officials predicted it would likely be a “frustrating season” due to pandemic stimulus measures the Internal Revenue Service has had to deal with, delays caused by the lack of staffing during the pandemic and budget cuts to the agency.

According to Treasury officials on the phone call, in addition to its normal season of processing income tax returns, the IRS is facing a backlog of several million unprocessed returns.

In addition, the agency is having trouble answering phone calls from taxpayers with questions about their returns.

IRS customer service agents answered fewer than 1 in 10 phone calls during the 2021 tax-filing season, according to National Taxpayer Advocate Erin Collins. Collins, who heads an independent arm of the agency designed to help taxpayers resolve problems, told Bloomberg News that the agency answers about 4 in 10 calls during off-peak periods.

“By definition, no matter how much more efficient you are, you can’t lose 25 percent of the workforce and assume you can do the same volume of work. It’s a problem across the board — information technology; revenue agents; people answering the phones,” John Koskinen, who served as commissioner of the IRS under presidents Barack Obama and Donald Trump, said.

“The fact the filing season has gone so well over the last three years is an amazing tribute to the capacity of the workforce, but if you keep underfunding the place it’s not a question of whether it will have a major problem — it’s a question of when.”

The agency’s officials urged taxpayers to file their returns electronically, instead of sending a paper return in, and to file as early as possible.

Treasury officials said the tax filing deadline for 2021 income is Monday, April 18. The usual deadline, April 15, falls on Good Friday this year.