During a press conference today, U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Finance Committee that oversees the Internal Revenue Service, was joined by representatives from the Rutgers Law Tax Clinic, tax professionals, and taxpayers to reiterate his calls for the agency to take immediate actions to get back to basics, reduce its massive backlog, and improve customer service in time for the 2022 tax filing season.
“Since last June, I’ve been raising the alarm about the IRS’s customer service problems, processing delays, and anticipated challenges, all of which are exacerbated by the significant backlog of tax returns that has accumulated. The Internal Revenue Service (IRS) has received six oversight letters from Senator Menendez, pushing them to go back to the fundamentals of opening mail, processing returns, and answering phone calls, he added. “There is no other institution, governmental or private, that has a greater impact on Americans than the IRS. As a result, we need an IRS that is effective.”
Even before the COVID-19 pandemic began in March 2020, the Internal Revenue Service (IRS) had been dealing with financial and staffing challenges for more than a decade. In the five years between 2010 and 2019, the agency’s budget shrank by $2.9 billion, or 20.4 percent. This, along with a decrease of roughly one-fourth of its employees, resulted in a “perfect storm” that culminated in the COVID-19 pandemic in March of the following year.
Following the onset of the pandemic, the Internal Revenue Service (IRS) closed all of its processing facilities for nearly three months and postponed the end of the 2020 filing season, resulting in a backlog of 13.1 million unprocessed tax returns by the end of 2020, according to the United States Government Accountability Office (GAO) (GAO). According to the National Taxpayer Advocate, the IRS has 23.7 million things to manually process as of January 28, 2022, including 17.9 million unprocessed returns and 5.8 million pieces of mail. The IRS has 23.7 million items to manually process as of January 28, 2022.
Senator Menendez said, “My office has received hundreds of calls in the last year and a half on IRS-related concerns — in fact, it is the single most significant issue that we are hearing about, and it is past time for the IRS to make adjustments.”
According to Rep. Donald M. Payne, Jr., “the present IRS backlog is a severe problem that is creating substantial delays in the time it takes for American citizens to get their tax refunds.” There have been several complaints from residents about it,” says the representative. I am grateful to Senator Menendez for providing us with the chance to speak directly about this subject. Every one of our constituents will appreciate the fact that we are listening to their worries and frustrations while also working with the IRS to resolve the matter,” says the president.
‘Navigating the complicated tax system is difficult enough in the best of circumstances. Low-income folks sometimes face extra challenges as a result of a lack of education or a lack of proficiency in a foreign language. “Our objective is to assist these people who have become disenchanted with the tax system in obtaining a favourable outcome in a tax dispute,” said Sandy Freund, Clinical Professor of Law and Charles Davenport Clinical Scholar at Rutgers Law School and Director of the Tax Clinic. “However, in recent years, all of us in the tax profession have had to contend with the extra challenge of working with the Internal Revenue Service, a bureaucracy that is now plagued by significant delays in case processing.” Cases are taking years to settle, and taxpayers’ supporting papers are not even being reviewed at all when they are handed in. In addition, refunds are often confiscated while claims are being adjudicated, making these delays very expensive to taxpayers.
According to Andrea Diaz, CPA, a partner at SKC & Co., CPAs and member of the New Jersey Society of CPAs, “Taxpayers and tax practitioners have experienced tremendous difficulties and frustration in dealing with the IRS as a result of erroneous notices, delays in processing returns and correspondence, and the IRS’s failure to answer a large majority of phone calls.” “We appreciate the time and emphasis that Senator Menendez has devoted to fix these issues.”
Sen. Menendez has long been raising the alarm about customer service performance and the agency’s significant processing backlogs. Last week, Sen. Menendez and Rep. Abigail Spanberger (D-Va.-07) launched a bicameral campaign with 45 colleagues asking the IRS to take urgent efforts to decrease its large backlog and enhance its customer experience during the 2022 tax filing season. Shortly after sending this letter, the IRS stated it will be setting together a second surge team to assist solve the large backlogs and continue to enhance customer service.
Sens. Menendez and Cortez Masto today led another letter calling on the IRS to suspend its planned shutdown of the Austin tax processing facility, considering how it will harm ITIN applicants and recipients. Shortly after mailing the notice, the IRS said it would not shut the Austin site.
In January, Sen. Menendez joined 210 colleagues in a bipartisan and bicameral request on the IRS to give penalty relief for taxpayers. This pushed the agency to address some of the most severe concerns impacting taxpayers by temporarily stopping some, but not all of the penalty notices. Sen. Menendez also urged IRS Commissioner Rettig last year to keep phone lines open while addressing the unprecedented backlog of unprocessed returns and to take concrete steps that will allow them to return back to basics such as answering phones, providing quality online and in-person services, and processing returns in a timely manner.