National Taxpayer Advocate Erin Collins believes that despite the IRS improving drastically this tax season, there is still plenty of more work to be done in order for the agency to continue improving. During an AICPA conference, Erin Collins went on to say, “This filing season has been as close to normal as possible, but they still have a huge backlog with amended returns. They also have problems with correspondence — which has been delayed. They’re back to four- to six- to eight-week processing for paper returns.” “Paper is a problem for the IRS —they don’t have the resources to quickly deal with it,” she continued.
Statistics
According to the stats provided by the American Institute of CPAs, the Internal Revenue Service is currently dealing with a backlog of at least; 3.7 million amended returns, 6.8 million “in suspense” returns, and 5.3 million correspondences. When going over these statistics, Erin Collins did note that the IRS is still recovering from the Covid pandemic that began in 2020.
Tradeoff
It was reported shortly after tax season that the IRS has answered 90% of its phone calls this tax season, with an average hold time of four minutes. However, Collins noted that this required some sacrifice. “The challenge is — ‘Yay, we’re answering the phones’ — but it came at a cost,” Collins said. “One of the things the customer service reps do in their downtime is process paper — correspondence and amended returns. If you’re answering the phones 80-90% of the time, guess what you’re not doing? Processing paper. And we’re now back to a backlog of paper correspondence and amended returns like a year ago.”
IRS Funding Slashed
Another important thing that was mentioned by Erin Collins was the agencies’ funding being slashed down to $58 billion when it was originally supposed to receive $80 billion in funding. However, the new debt ceiling deal cut that funding down significantly.
Wrap Up
Collins and the AICPA still believe that the IRS can accomplish a lot of customer service goals, despite its funding being slashed. However, Collins did note that the AICPA can only encourage the IRS where to focus on funding, but the IRS may use the funding for other things that are not beneficial to taxpayers, such as the hiring of audit agents. As time goes on, we will have to wait and see if the IRS can continue to improve, without getting all of the funding it expected.