IRS Backlog Already Threatening 2022 Tax Season | Citizens Against Government Waste

IRS Backlog Already Threatening 2022 Tax Season

The WasteWatcher

The 2022 tax filing season which has barely begun, is already hitting a snag.  On February 11, 2022, The Washington Post reported that the IRS is facing a backlog of nearly 24 million tax returns from last year’s filing season.  This massive pileup of tax returns is slowing down the IRS and the agency is warning taxpayers may have to wait longer for a tax refund this year.   

Beyond the current 2021 tax season backlog, there are several issues the IRS is currently facing, mostly relating to the use of old technology and equipment.  On February 7, 2022, the Treasury Department Inspector General for Tax Administration (TIGTA) released a report detailing several of these problems.  Perhaps the main problem facing the IRS is outdated equipment.  The IRS uses equipment that scans envelopes to see if a check is contained inside.  According to the TIGTA report, this equipment is at least 20 years old and the most recent upgrades to the equipment took place 15 years ago.  This equipment is so old that IRS employees and managers can’t even find tools to make minor repairs to the equipment.   

Another major challenge for the IRS is recruiting, hiring, and training new employees.  The TIGTA report identifies several reasons for the IRS’ inability to hire and retain workers, including not offering competitive pay, a lengthy on-boarding process, and candidates failing to pass a background check or not showing up for work after being hired.  Nearly every business and industry across the country is facing similar hiring woes.  This is in large part due to the increased unemployment payments and COVID-19 “relief” checks the government gave to Americans.  There have been several different attempts to address the hiring shortage, including the creation of an IRS task force to improve hiring and the issuance of Executive Order 14003, which would increase pay for all federal employees to a minimum of $15 an hour.  Despite these efforts and increased government spending, the IRS is still approximately 2,000 employees short of their goal.   

The delay in processing the 2021 tax season has had profound impacts on the IRS.  According to the TIGTA report, through June 2021, the IRS has missed out on approximately $56 million in interest alone because checks weren’t processed and deposited on time.  Taxpayers are also adversely impacted by having to wait hours to speak to a customer service representative who could answer their questions.  Despite the IRS’ increased efforts to hire and train more customer service employees, taxpayers are still left in limbo when trying to resolve important questions they have about their taxes.  

The underlying technology infrastructure at the IRS has needed to be modernized and improved for a long time.  In 2013, TIGTA issued a report spotlighting the agency’s problems with protecting the privacy of taxpayer information noting at the time that the agency had not implemented an effective system to protect this data.  In August 2020, TIGTA released another report, which stated, “The IRS has not developed specific or long-term plans to address updating, replacing, or retiring most of its legacy systems.  Through various initiatives, the IRS identified 45 systems for modernization or candidates for modernization and 34 systems for retirement.”  In its annual review of the IRS, released on December 14, 2021, TIGTA noted that “Weaknesses within the IRS’s computer operations could begin to adversely affect its ability to meet its mission of helping taxpayers comply with their tax responsibilities and enforcing the tax laws with integrity and fairness to all.” 

Perhaps the massive backlog the agency is now facing will finally be the spark that convinces the IRS to make long-awaited and much-needed improvements.  It is clear that spending more money won’t solve all of the problems at the IRS but updating equipment and implementing more efficient work processes could make progress on resolving the backlog of paperwork.  In the meantime, Americans should be prepared for long wait times to get their questions answered or receive a tax refund for the 2022 tax season.   

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