About last year…
2021 was the most challenging year taxpayers and tax professionals have ever experienced according to the National Taxpayer Advocates. They released their 2021 Annual Report, and they report tens of millions of taxpayers experienced delays in the processing of their returns, and "processing delays translated directly into refund delays." The report says "[t]he imbalance between the IRS's workload and its resources has never been greater."
Among other things, 478 million stimulus payments were issued totaling $812 billion and Advance Child Tax Credit payments were issued to over 36 million families totaling over $93 billion.
Processing delays led to a cascade of customer service problems…
Telephone service was the worst it has ever been. The combination of processing delays and questions caused call volumes to almost triple from the prior year to a record 282 million calls. The IRS encourages people to use online resources before calling. They urge people to check IRS.gov and establish an online account to help them access personal tax account information including filing status, balance, payments, and historical and current tax records.
WHY, you might ask…
The report says millions of e-filed returns were suspended during processing due to discrepancies between amounts claimed on the returns and amounts reflected on IRS records. The most common discrepancy involved Recovery Rebate Credit claims by taxpayers who did not receive some or all of their stimulus payments. These returns had to be manually reviewed, and the IRS issued more than 11 million math error notices to taxpayers. The new advanced child tax credits and 3rd stimulus may result in additional discrepancies between amounts claimed on tax returns and in IRS records.
“Paper is the IRS's Kryptonite, and the agency is still buried in it." The IRS took months to process taxpayer responses to its paper notices, further delaying refunds. As of late December, the IRS had backlogs of 6 million unprocessed returns, 2.3 million unprocessed amended returns, and about 5 million pieces of unopened mail – with some of these submissions dating back at least to April. This does not include the millions of unprocessed business returns.
About the Taxpayer Advocate Service
TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. You may call TAS toll-FREE at 877-777-4778. TAS can assist in resolving an IRS problem. For more info about TAS, go to https://www.taxpayeradvocate.irs.gov
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