After Biden stimulus, ‘continued confusion’ at IRS

By Casey Harper

(The Center Square) – Lawmakers on both sides of the aisle are pressuring the Internal Revenue Service over ongoing problems and unaddressed issues from last year’s filing season even as this year’s season is in full swing.

A bipartisan group of more than 100 lawmakers from the U.S. House and Senate sent a letter to the IRS raising concerns about “continued confusion” and “numerous problems” with the agency.

“We remain concerned that the IRS does not have a comprehensive plan to remedy the numerous problems affecting taxpayers, despite the fact that this filing season is already well underway,” the lawmakers wrote to IRS Commissioner Charles Rettig. “For example, there is continued confusion about which notices may be unilaterally suspended by the IRS, beyond the notices the IRS has already suspended, among other issues.”

The problems began in the aftermath of President Joe Biden’s Child Tax Credit, a monthly payment program that began last summer and continued through the end of the year. That federal program, administered by the IRS, distributed monthly payments to parents based on the age and number of their children.

The hefty bureaucratic undertaking, along with stimulus check distribution, resulted in major delays at the IRS.

The National Taxpayer Advocate (NTA) published its federally commissioned report in December, which said that the IRS had 6.2 million unprocessed individual returns, 2.4 million unprocessed amended individual returns, 2.8 million unprocessed business returns, and 427,000 amended business returns. The NTA also reported the IRS had roughly 4.75 million pieces of unprocessed correspondence from taxpayers.

Republicans on the House Oversight Committee sent a letter to the IRS in February with a similar theme, demanding the IRS remedy bureaucratic issues. Those Republicans also pointed to “COVID-19 related telework policies” allowing most IRS employees to work remotely.

“For many Americans, their tax refund can equal six weeks of take-home income,” the letter said. “The volume of tax returns and refunds completed each year shows the far-reaching impact that processing delays could have for the average American. Processed returns are also essential for those who may be entitled to apply for other government benefits such as loans administered by the U.S. Small Business Administration. It is therefore imperative that the IRS take steps to mitigate any processing delays, which can delay refunds and access to economic relief programs.”

The Congressional inquiries have placed a steady stream of pressure on the agency. A bipartisan group of 214 lawmakers sent a letter to the IRS and Treasury Department in January, emphasizing the negative impact on small businesses.

“In many cases, the delayed processing of amended returns has been devastating to small businesses in our communities whose applications for emergency loans from the Small Business Administration have been caught in limbo nearly two years after the COVID-19 pandemic began,” the letter said. “The situation has deteriorated to a point that the Taxpayer Advocate Service (TAS) will no longer accept cases solely involving the processing of amended returns. This has made it impossible for frustrated taxpayers to find any help.”

The IRS issued an “urgent reminder” in January, warning Americans to file electronically “to help speed refunds” this year.