False Promise? IRS Confronts Uphill Battle to Clear Tax Returns

March 29, 2022 Topic: IRS Blog Brand: Politics Tags: Tax ReturnsIRSTax RefundIRS Backlog

False Promise? IRS Confronts Uphill Battle to Clear Tax Returns

There are few signs that anything has really changed at the agency.

Internal Revenue Service (IRS) Commissioner Chuck Rettig recently told the House Ways and Means Committee that he expects the agency to fully clear its massive backlog of personal tax returns and correspondence “before December.”

“Barring any unforeseen circumstances, if the world stays as it is today, we will be what we call ‘healthy’ by the end of calendar year 2022, and enter the 2023 filing season with normal inventories,” Rettig said.

However, as there are few signs that anything has really changed at the agency, there are reasons to doubt the beleaguered IRS’ ability to come through on its ambitious promise. 

“The commissioner said that he commits [the IRS is] going to get through all of the returns by December of 2022, and I would love to see that, but I will be circumspect in thinking that that’s actually going to happen,” Nina E. Olson, who served as the national taxpayer advocate in the Treasury Department from 2001 to 2019 and is now the executive director of the nonprofit Center for Taxpayer Rights, told the Hill.

“What will happen to taxpayers—and this will put pressure on preparers—is that their returns are going to be held up. They will be stopped by any number of things that happen in the IRS return processing system. There are all sorts of ways the return can go wrong, even after it’s filed, and especially now,” she continued.

Staffing Help on the Way?

Rettig noted that the IRS is committed to hiring a total of 5,000 workers in the coming weeks and another 5,000 next year. On top of the new hires, the agency will deploy a second “surge team” by reassigning 700 employees at its processing centers in Utah, Missouri, and Texas.

But Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center, told the Hill that “they won’t get 5,000 people on board before the filing season is over.”

“You have to find people, you have to bring them on board, and then you have to train them,” she continued.

Almost Fifty Million Refunds Sent Out

Despite the continued struggles at the agency, it appears that the processing of this year’s tax returns has gone mostly as planned. The IRS has already issued more than forty-five million tax refunds worth nearly $152 billion in total, with the average refund coming in at $3,352—roughly $400 more than last year’s amount.

However, with tax day still several weeks away, the average refund amount could still potentially change considerably.

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.