According to the latest report given by the Internal Revenue Service, they are still facing numerous challenges related to their lack of employees. This is ultimately hindering the efforts of the IRS to combat the backlog of unprocessed returns from the filing seasons of both this year and last year.
Backlog Larger Than Last Season
According to a report that was released by the Treasury Inspector General of Tax Administration(TIGTA), the inventory of unprocessed returns from 2021 is even larger than inventories recorded from the 2020 filing season. The report also states that roughly 16.5 million Accounts Management cases, transactions, and individual tax returns remained in inventory as of the end of the 2021 calendar year.
IRS at Work to Reduce Backlogged Returns
During a congressional meeting that took place at the end of April, IRS Commissioner Charles Rettig said that the service has managed to reduce the inventory of unprocessed returns to roughly 2.5 million. According to figures released by the IRS, the number of unprocessed paper returns on the backlog is 2.5 million for 2021 and roughly nine million remaining from the 2022 filing season. Rettig responded to these figures stating that the IRS has managed to reduce the numbers to 1.8 million from 2021 and approximately 4 million from 2022. He also believes that the 2022 returns should not be considered backlogged because the filing deadline was only a few weeks ago.
IRS Hiring Challenges Prominent
Part of the Treasury Inspector General of Tax Administration report states, However, significant staffing shortages continue to hamper the IRS’s efforts to address backlog inventories and affect the IRS’s ability to ensure that current year tax returns are processed timely,” said the report. “More than 8.4 million individual tax returns and transactions remained to be processed as of the end of the calendar year 2021. In addition, more than 8 million cases remained in Accounts Management. This represents a 33% increase in the number of unprocessed tax returns and a 61% increase in the number of amended tax returns that remained to be processed.”
IRS Has Direct Hiring Authority
The IRS’ effort to recruit more employees has been on display as they said earlier this year that they plan on hiring 100,000 employees within the year. The IRS has recently been given direct hiring authority which was granted to them by U.S Congress. This has given the agency the ability to hold in-person and virtual job fairs in cities such as Kansas City, Austin, and Ogden which is a city in Utah. According to Rettig, these efforts allowed the IRS to make roughly 2,500 job offers after interviews.
Newly Added Employees
The TIGTA report says that as of mid-March of 2022, the Internal Revenue Service has onboarded 521 employees for Submission Processing, which is not even 10% of the agency’s goal to hire 5,473 Submission Processing Employees. When it comes to the need for taxpayer account assistance, the IRS is also experiencing shortcomings. The Same TIGTA report further states that the IRS met roughly 75% of its onboarding goal for Accounts Management Employees, hiring 3,827 people for that area.
Wrap Up
When Commissioner Rettig was addressing Congress, he was proud to announce the IRS’ onboarding of 2,500 employees, which he credited to the direct hiring authority that was recently granted to the agency. He went on to talk about the current state of the IRS saying, We’re trending in a good direction, and I am committed to being healthy by the end of this year.” He did show optimism while also acknowledging the potential challenges that previously halted the agency such as the Covid pandemic in 2020.
As the IRS tries to keep up with the changing times, there are a few things a taxpayer can do to prevent their return from falling victim to the overgrowing backlog. Talking with your accountant can help ensure all information provided on your return is correct. Having all the correct information can prove key in preventing a return from having to go on further IRS review. Filing electronically will also steer your return clear of the paper disaster that the IRS is dealing with.