“The agency is a hot mess,” said Washington Post writer Michelle Singletary of the IRS in a July 2 column detailing her tax return frustration this year.
Her story is probably familiar to many. She and her husband received a letter telling them they owed more than $11,000 (an incorrect number, Singletary said) and when they tried to reach out and correct the error, it was next to impossible to contact the agency.
“I’m angry not for just myself but for the many people who are frustrated trying to get help from the IRS,” she said. “It might take a 15-minute call to resolve my issue — if I could get somebody on the phone. But many attempts end in being routed electronically through a maze of prompts that leave me wanting to smash my phone.”
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According to written testimony from IRS Commissioner Charles P. Rettig, employees at one point during the 2021 filing season received 1,500 calls per second. Overall, the agency received a total of 150 million calls – a 300 percent increase compared to previous years – and only answered around 37 million.
A report from the National Taxpayer Advocate said that 136 million individual income tax returns and issued 96 million refunds totaling $270 billion during the 2021 filing season. Additionally, the IRS administered three rounds of stimulus payments worth $807 billion when the report was written.
However, more than 35 million backlogged tax returns were left over by the end of the season, said the report. These returns require manual processing; 15.8 million are suspended pending further review and 10.3 of those in the Error Resolution System.
Singletary said her tax return error stems from an IRS misunderstanding of 529 college plan funds. She said it may be easier to get someone on the phone if the agency received more funding than the 60 percent level of service budget it was allotted this year.
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President Joe Biden previously proposed a $80 million cash infusion for the IRS as part of the “American Families Plan”, as well as policy changes. These changes are not expected due to GOP opposition, said another Washington Post article published Wednesday.
Steve Forbes and Stephen Moore argued against the $80 million plan in an op-ed published in The Hill that expanding the IRS budget and hiring more agents “sounds like as much fun as a proctology exam.” They called for a 17 percent flat tax instead.
More recently, $40 billion for heightened IRS enforcement was included in a bipartisan infrastructure deal reached last month by the White House and a group of Democratic and Republican senators. This increased IRS spending is expected to bring in around $140 billion in new revenue.
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So far, the $40 million included in the bipartisan deal are expected to cover new hires, technology updates and improvements to taxpayer compliance programs, said the Washington Post.
Bloomberg reported last month that the IRS is hiring thousands of auditors as it gears up for the potential funding.
However, “the IRS provision in particular is drawing opposition from well-funded conservative groups,” who believe the agency is politically motivated, Washington Post said.
As funding for the IRS remains under scrutiny by Congress and a backlog of tax returns remains, the agency said Wednesday it is working to roll out the new monthly Advance Child Tax Credit payments.