For IRS, backlogs and identity theft are still problems despite funding boost, watchdog says

Jan 10, 2024, 8:02 AM

FILE - A sign outside the Internal Revenue Service building is seen, May 4, 2021, in Washington. Th...

FILE - A sign outside the Internal Revenue Service building is seen, May 4, 2021, in Washington. The IRS is still too slow to process amended tax returns, answer taxpayer phone calls and resolve identity theft cases, according to an independent watchdog within the agency. The organization sent a report to Congress Wednesday that the backlog of unprocessed amended returns has quadrupled from 500,000 in 2019 to 1.9 million in October last year. (AP Photo/Patrick Semansky, File)

(AP Photo/Patrick Semansky, File)

WASHINGTON (AP) — The IRS is still too slow in processing amended tax returns, answering taxpayer phone calls and resolving identity theft cases, according to an independent watchdog within the agency.

The federal tax collector needs to improve its processing and taxpayer correspondence issues despite a massive boost in funding provided by the Democrats’ Inflation Reduction Act, according to an annual report Wednesday to Congress from Erin M. Collins, who leads the organization assigned to protect taxpayers’ rights under the Taxpayer Bill of Rights.

The report serves as a reality check of sorts as IRS leaders say the funding boost is producing big improvements in services to taxpayers. GOP critics, meanwhile, are trying try to claw back some of the money and painting the agency as an over-zealous enforcer of the tax code.

The IRS is experiencing “extraordinary delays” in assisting identity theft victims, taking nearly 19 months to resolve self-reported cases, which the report calls “unconscionable” since a delay in receiving a refund can worsen financial hardships.

Additionally, the backlog of unprocessed amended returns has quadrupled from 500,000 in 2019 to 1.9 million in October last year. And taxpayer correspondence cases have more than doubled over the same period, from 1.9 million to 4.3 million, according to the report.

The report also says IRS employees answered only 35% of all calls received, despite the agency claiming 85%. The IRS doesn’t include calls where the taxpayer hangs up before being placed into a calling queue.

And while the agency has been on a hiring spree — thousands of workers since 2022 — the new employees are in need of proper training, the report says. The 2023 Federal Employee Viewpoint Survey shows that a quarter of IRS employees don’t think they receive adequate training to perform their jobs well.

“It is critical that the IRS make comprehensive training a priority and ensure that new hires receive adequate training before they are assigned to tasks with taxpayer impact,” Collins said.

IRS Commissioner Daniel Werfel said in a statement that the Taxpayer Advocate “raises a number of very important areas that we are looking at to make improvements” with Inflation Reduction Act funding.

“Many of these issues identified in her report ultimately depend on adequate IRS resources,” he said. “This is another reason why the Inflation Reduction Act funding and our annual appropriations are so critical to making transformational changes to the IRS to help taxpayers and the nation.”

The federal tax collection agency originally received an $80 billion infusion of funds under the Inflation Reduction Act but that money is vulnerable to potential cutbacks.

Last year’s debt ceiling and budget cuts deal between Republicans and the White House resulted in $1.4 billion rescinded from the agency and a separate agreement to take $20 billion from the IRS over the next two years and divert those funds to other nondefense programs.

Collins said in the report that she believes some of the law’s funding that was provided for enforcement should be redirected to improving taxpayer services “to enable the IRS to make the changes necessary to transform the taxpayer experience and modernize its IT systems in the next few years.”

“I encourage the IRS to put more emphasis on reducing its paper processing backlog in 2024,” Collins said in her report.

The report comes shortly after the IRS announced that the 2024 filing season begins on Jan. 29. Agency leaders say better customer service and tech options will be available to taxpayers and most refunds should be issued in less than 21 days.

The agency has been pulling itself out of decades of underfunding — by the end of the 2021 filing season, it faced a backlog of over 35 million tax returns that required manual data entry or employee review.

Last April, IRS Commissioner Daniel Werfel released details of IRS plans to use its IRA money for improved operations, pledging to invest in new technology, hire more customer service representatives and expand the agency’s ability to audit high-wealth taxpayers.

Additional money for the IRS has been politically controversial since 2013, when the agency during the Obama administration was found to have scrutinized political groups that applied for tax-exempt status. A report by the Treasury Department’s internal watchdog found that both conservative and liberal groups were chosen for close review

United States News

Associated Press

Public health officer in Michigan keeps her job after lengthy legal fight over COVID rules

WEST OLIVE, Mich. (AP) — An embattled public health officer in Michigan will get to keep her job, after a lengthy legal fight with county commissioners over pandemic-era mask mandates concluded Tuesday with the board bowing to the will of a court-ordered arbitrator. The Ottawa County Board of Commissioners voted 11-0 Monday to retain Adeline […]

32 minutes ago

Associated Press

Motive in killing of Baltimore police officer remains a mystery as trial begins

BALTIMORE (AP) — As the trial opened Tuesday for a man accused in the deadly shooting ambush of a Baltimore police officer, the motive in the killing remains shrouded in mystery more than two years later. Officer Keona Holley, who was shot multiple times while sitting in her marked patrol car during an overnight shift, […]

36 minutes ago

Associated Press

Bill to set minimum marriage age to 18 in Washington state heads to governor

OLYMPIA, Wash. (AP) — A law to establish 18 as the minimum marriage age in Washington state is headed to the governor’s desk for his signature. State lawmakers in the House and Senate passed House Bill 1455 this session after the measure stalled in the Senate last year and other bills failed to gain traction […]

57 minutes ago

Associated Press

Iowa county is missing $524,284 after employee transferred it in response to fake email

DUBUQUE, Iowa (AP) — Officials in one eastern Iowa county are trying to track down $524,284 they believe was stolen when an employee transferred it in response to a fake email message that appeared to be from the city of Dyersville. Dubuque County officials announced the money was missing Monday, according to the Telegraph Herald. […]

1 hour ago

Associated Press

Rapidly expanding wildfires in the Texas Panhandle prompt evacuations

CANADIAN, Texas (AP) — A rapidly widening Texas wildfire doubled in size Tuesday and prompted evacuation orders in at least one small town as strong winds, dry grass and unseasonably warm highs fueled the blaze in the state’s rural Panhandle. Republican Gov. Greg Abbott issued a disaster declaration for 60 counties as the largest fire […]

2 hours ago

Associated Press

Lawsuit claims isolation and abuse at Wyoming Boys School

CHEYENNE, Wyo. (AP) — Staff at Wyoming’s state youth detention facility locked juveniles in solitary confinement for weeks at a time, repeatedly buckled one in a restraint chair for up to 12 hours a day and poked fun at another while withholding the leg brace he needed for his disability for months, a federal lawsuit […]

2 hours ago

Sponsored Articles


DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.


Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.


Sanderson Ford

The best ways to honor our heroes on Veterans Day and give back to the community

Veterans Day is fast approaching and there's no better way to support our veterans than to donate to the Military Assistance Mission.

For IRS, backlogs and identity theft are still problems despite funding boost, watchdog says