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Report: Backlogs Likely to Continue, As IRS Attained Under 67 Percent of Its Hiring Goal Last Year

By:
Ruth Singleton
Published Date:
Mar 16, 2022

TIGTA logo

The Treasury Inspector General for Tax Administration (TIGTA) has released a report projecting that IRS backlogs will continue into the 2022 filing season. It found that backlogs from the 2020 filing season slowed down the agency during the 2021 filing season, as the IRS achieved just under 67 percent of its hiring goal for submission processing last year. 

The report also found that the IRS provided only a 15.5 percent level of service on its toll-free telephone lines, with a 19-minute average wait time. Specifically, as of May 28, 2021, taxpayers made 185 million total attempts to contact the IRS by calling the various customer service toll-free telephone assistance lines. The IRS reported that it answered 25.6 million calls with automation. IRS assistors answered more than 11.4 million calls. By comparison, as of May 29, 2020, there were 74 million call attempts, 20 million automated calls answered, and 7 million assistor calls answered, with a 59.9 percent level of service and a 12-minute average wait time.

The IRS also provides self-assistance options that taxpayers can access at any time, including its IRS2Go app, YouTube videos, and interactive self-help tools on IRS.gov. In addition, the IRS offers Instagram, Twitter, and Facebook.  

In addition, the report found that, as of Oct. 14, 2021, the IRS had issued more than 13.5 million recovery payments totaling $6.3 billion for taxpayers who claimed unemployment compensation. TIGTA’s review of 8.3 million of the 13.5 million recovery payments determined that the payments were accurate.

Also, in its introductory statement, the report addressed processes that the IRS implemented with regard to tax credits. “The IRS implemented processes to allow taxpayers to elect to use prior year earned income when claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC),” the report said. “TIGTA found that the IRS correctly allowed credits for 2.2 million EITC claims totaling more than $7.6 billion. However, TIGTA identified 13,130 taxpayers who received more than $20.5 million less in EITCs and 900 taxpayers who received $485,415 more in EITCs than they were entitled to receive. TIGTA also identified 8,335 taxpayers who received $8.3 million less in ACTCs and 1,257 taxpayers who received $1.5 million more in ACTCs than they were entitled to receive. In addition, as of October 14, 2021, the IRS has issued more than 13.5 million recovery payments totaling $6.3 billion for taxpayers who claimed unemployment compensation. TIGTA’s review of 8.3 million of the 13.5 million recovery payments determined that the payments were accurate.” 

TIGTA made 10 recommendations for the IRS to implement in order to correct returns that TIGTA identified as potentially erroneous, to ensure that applicable computer programming changes are requested and implemented, and to evaluate the need for the current Identity Protection Personal Identification Number process in submission processing. Those recommendations are as follows: 

Recommendation 1: The Commissioner, Wage and Investment Division, should, as previously agreed, develop and implement processes and procedures to identify and correct tax examiner entries in verified fields that exceed statutory limits, including a process to ensure that tax returns with verified amounts are systemically reprocessed through ERS programming before being released for processing. Recommendation 2: The Commissioner, Wage and Investment Division should review and correct the remaining 183 out of 191 cases TIGTA identified and recover the ACTC amounts that were issued in error. Recommendation 3: The Commissioner, Wage and Investment Division should review and correct the 14,030 tax returns for which the tax examiner did not allow the use of the Tax Year 2019 earned income to calculate the EITC amount. Recommendation 4: The Commissioner, Wage and Investment Division should review and correct the 9,592 tax returns for which the tax examiner did not allow the use of the Tax Year 2019 earned income to calculate the ACTC amount. Recommendation 5: The Commissioner, Wage and Investment Division should reinforce guidance for Error Resolution tax examiners to ensure that they are aware to allow the use of PYEI during the 2022 Filing Season, when applicable. Recommendation 6: The Deputy Commissioner (Services and Enforcement) should prioritize and fully fund the development of processes and procedures to identify and correct tax examiner entries in verified fields that exceed statutory limits, including a process to ensure that tax returns with verified amounts are systemically reprocessed through ERS programming before being released for processing. Recommendation 7 (E-Mail Alert): On May 11, 2021, TIGTA alerted the Director, Submission Processing, Wage and Investment Division, that taxpayers were excluding unemployment income when they did not meet modified adjusted gross income thresholds. TIGTA recommended that IRS management review and correct the 4,838 tax returns it identified, as well as any tax returns meeting the same condition that were filed after April 22, 2021, whereby taxpayers with modified adjusted gross income of more than $150,000 erroneously excluded their unemployment income. Recommendation 8: The Commissioner, Wage and Investment Division, should ensure that the 1,962 tax accounts that had estimated tax payments available in the spouse’s account are resolved (as well as any tax returns meeting the same condition that were filed after May 27, 2021). Recommendation 9: The Commissioner, Wage and Investment Division, should confirm that the programming issues associated with the 1,962 tax accounts are updated to prevent this from happening for future EIPs. Recommendation 10: The Commissioner, Wage and Investment Division, should establish a timeline to evaluate the IP PIN unpostable process and determine if it is an effective use of resources

The IRS agreed with all 10 of TIGTA’s recommendations. 

 

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