WASHINGTON (The Center Square) — Republicans and Democrats are hammering the Internal Revenue Service for its millions of pending tax returns.
The IRS’ troubles can be traced in part to President Joe Biden’s monthly child tax credit, part of a $1.9 trillion “COVID relief” bill. The program tasked the IRS with distributing federal funds last year to millions of Americans based on age and the number of children they had.
The National Taxpayer Advocate (NTA) released its federally commissioned report in mid-December, which found that the IRS still had 2.8 million unprocessed business returns, 6.2 million unprocessed individual returns, 2.4 million unprocessed amended individual returns, and 427,000 amended business returns. The report also revealed that the IRS has approximately 4.75 million pieces of unprocessed correspondence from taxpayers.
Now the IRS is warning of more problems this year. The IRS issued an “urgent reminder” in January, warning Americans to file electronically “to expedite refunds” before the next tax season.
IRS Commissioner Charles Rettig published an op-ed in Yahoo News last week sharing this message.
“As the IRS begins this tax season, it continues to face tremendous challenges. Our dedicated staff have done everything they can to prepare for April 18 filing day,” he said. -he writes. “Today, millions of people are still waiting for previous years’ returns to be processed and refund checks to arrive in the mail, while preparing for their next tax return. While we may not be able to resolve these significant issues immediately, our employees are doing all they can, and I am committed to returning to normal inventory levels by next year.”
Republicans on the House Oversight Committee sent a letter to the IRS demanding that they resolve bureaucratic issues. Those Republicans pointed to outdated software and “COVID-19-related telecommuting policies” allowing most IRS employees to work remotely.
“For many Americans, their tax refund can equal six weeks of net income,” the letter says. “The volume of tax returns and refunds made each year shows the significant impact processing delays could have for the average American. Processed returns are also critical for those who may be eligible to apply for other benefits. such as loans administered by the US Small Business Administration, so it is imperative that the IRS take steps to mitigate processing delays, which can delay repayments and access to economic assistance programs.
But the Republicans are not the only ones to be affected by this problem. U.S. Sen. Bob Menendez, DN.J., a member of the Senate Finance Committee, which oversees the IRS, joined U.S. Rep. Abigail Spanberger, D-Va., in a letter to the IRS signed by 45 members of Congress. They urged the IRS to increase overtime and add staff to fix the problem.
“We continue to hear from voters who are still waiting for their 2020 tax returns, have received confusing notices about late payments they have already paid, and cannot reach anyone at the IRS for assistance. Many from these issues stem millions of unprocessed items of correspondence beginning in 2021,” the letter said, adding that “taxpayers need more immediate relief, especially with the 2022 filing season already underway.” .
The lawmakers also called on the IRS and the US Treasury Department to provide “sanctions relief” to Americans, many of whom are receiving notices of non-payment of their taxes. The problem is that they have paid their taxes, but the IRS has not yet processed their returns.
A bipartisan group of 214 lawmakers sent a letter to the IRS and the Treasury Department in January highlighting the negative impact on small businesses.
“In many cases, the late processing of amended returns has been devastating to small businesses in our communities whose applications for emergency loans from the Small Business Administration were caught in limbo nearly two years into the COVID-19 pandemic,” the letter read. . “The situation has deteriorated to the point that the Taxpayer Advocate Service (TAS) will no longer accept cases involving only the processing of amended returns. This has made it impossible for frustrated taxpayers to find help.”