The Internal Revenue Service (IRS) continues to justify its reputation as one of the most problematic and painfully bureaucratic institutions in the federal government.  During the 2021 filing season, the IRS received 167 million phone calls from taxpayers, but only managed to answer 9 percent of them.  These problems continued into 2022.  To date, the IRS has received 73 million phone calls, of which 10 percent were answered.  

In its May 2022 Objectives Report to Congress Fiscal Year 2023, the National Taxpayer Advocate reported a backlog of 21.3 million paper tax returns.  The advocate noted that 96 percent of the nearly 139 million tax returns filed for the 2022 filing season were sent electronically.  At the end of the 2021 tax filing season, the IRS had a backlog of 35.8 million returns, split between unprocessed paper and e-filed returns that needed to be processed by hand.  Of these, paper processing remains the agency’s biggest challenge, and that will likely continue throughout 2022.  There was a backlog of 6.2 million unprocessed returns and 2.6 million amended returns as of April 22, 2022, and the advocate noted that “many taxpayers are still waiting for refunds from their 2020 tax filings.”  The IRS had a total inventory of 29.1 million documents requiring manual processing, including 13.3 million paper returns and more than 5 million pieces of taxpayer correspondence. 

In February 2022, the IRS reassigned employees from other areas of the agency to assist with processing taxpayer paperwork and correspondence and contracted for clerical assistance.  While this is a step in the right direction, it is unlikely to be sufficient to clear the backlog before the 2022 filing season begins.

The problems facing the IRS have been amplified by the agency’s use of outdated technology and equipment.  One machine still in use by the IRS is designed to scan an envelope to see if there is a check inside.  These machines, which are at least 20 years old, are used for scanning paper returns, and require employees to manually move paper returns through many different processing stations.  Replacement parts for older machines are hard, if not impossible to find.  The delays caused by obsolete equipment and inefficient work processes have caused more than just headaches for taxpayers, they have also led to wasteful government spending.   An April 11, 2022, Government Accountability Office report found that the IRS had to pay individual taxpayers $3 billion in interest on individual and business refunds in 2020, a 50 percent increase from 2019.

It is past time for the IRS solve these issues and provide adequate customer service to taxpayers.  Government agencies serve the people, and the IRS has continually fallen short in achieving this mission.

Written by Slade Aldison