Can the Beleaguered IRS Ever Be Fixed?

Can the Beleaguered IRS Ever Be Fixed?

The IRS is currently facing a crisis, to put it mildly. 

The beleaguered Internal Revenue Service (IRS) entered tax season with twenty-four million unprocessed paper returns and correspondence—all the while trying to meet the demands of processing the new returns that are coming in daily. It is a monumental task that few actually believe can be successfully accomplished.

To help with the massive backlogs, so-called “surge teams” have been called upon. Now, according to the Washington Post, the IRS has its sights set on hiring 10,000 employees “by recruiting for jobs across the agency that have gone unfilled for years.”

“The agency will accelerate recruiting in the coming weeks for 80 distinct positions, from entry-level clerical workers to advanced engineers and tax attorneys, one person familiar with the plan said,” the Post wrote. “Among the recruiting targets are high-skill technology professionals to modernize its outdated infrastructure.”

Taxpayer Pain

For many American taxpayers, however, it is too little, too late. “Taxpayers owed refunds are often not getting them and cannot find out why; taxpayers who filed returns are being sent incorrect notices saying they failed to file; taxpayers who made payments are being told they did not pay and are threatened with collection action; and taxpayers who have questions cannot get answers,” former IRS Commissioners Fred Goldberg, John Koskinen, and Charles Rossotti wrote in an op-ed for Yahoo Finance.

“These failures affect people in all walks of life, businesses large and small, non-profits, and tax advisors. A Mom waiting on her refund; a tax expert at the Tax Policy Center whose paper return was lost; organizations that can’t get their Powers of Attorney processed; even former IRS commissioners are not exempt. One of us recently was assessed a penalty for failure to pay a quarterly payment, which was actually paid but not recorded properly by the IRS,” they continued.

Crisis Response Needed

It is against this unsavory backdrop that the former commissioners are calling on the Biden administration “to mount a full-on crisis response.” They later warned that “only a long-term commitment can rebuild the IRS. And that requires three things from Congress: long-term funding, whether as part of a slimmed-down reconciliation bill or as a stand-alone bill; additional authority for managing its workforce; and establishment of clear goals by Congress for providing quality service and reducing the tax gap.”

In another op-ed published by Yahoo News, IRS Commissioner Chuck Rettig touched on those same staffing and budgeting issues. According to the Congressional Budget Office, compared to 2010, the IRS has approximately 20,000 fewer employees and 20 percent less funding when adjusted for inflation. Such staffing levels mean that they have remained roughly the same since the 1970s.

“Decades of IRS underfunding are now painfully evident. Taxpayers are suffering and faith in our democracy declines,” the former commissioners wrote. “The Biden Administration and Congress must act now to turn around this disaster that was long in the making and easily predictable.”

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.