The National Taxpayer Advocate (NTA), Erin M. Collins, has released her 2021 Annual Report to Congress. The NTA called the calendar year 2021 the most challenging year taxpayers and tax professionals have ever experienced. The report states that tens of millions of taxpayers experienced delays in the processing of their returns, and with 77 percent of individual taxpayers receiving refunds.
Further, the report credited the IRS for performing well under difficult circumstances. Since the start of the pandemic, the IRS, in addition to its traditional work, implemented significant programs enacted by Congress. Among other things, it has issued 478 million stimulus payments (referred to as Economic Impact Payments or EIPs) totaling $812 billion and has sent Advance Child Tax Credit (AdvCTC) payments to over 36 million families totaling over $93 billion.
Moreover, the report drew attention to the imbalance between the IRS’s workload and its resources has never been greater. Since fiscal year (FY) 2010, the IRS’s workforce has shrunk by 17 percent, while its workload (as measured by the number of individual return filings) increased by 19 percent. The report reiterated the NTA’s longstanding recommendation that Congress provide the IRS with sufficient funding to serve taxpayers well.
The report made numerous recommendations to address taxpayer problems, including the following:
- Utilizing scanning technology and reducing barriers to e-filing.
- Deploying customer callback technology on all telephone lines, so taxpayers and tax professionals do not have to wait on hold and can receive a return call when the next customer service representative is available.
- Improving online taxpayer accounts and allowing taxpayers to communicate with the IRS routinely by secure email.
- Creating and updating a weekly dashboard on the IRS website to provide the public with specific information about delays.
Additionally, the NTA’s 2022 Purple Book proposed 68 legislative recommendations for consideration by Congress. Among them are the following:
- Providing sufficient funding for the IRS to improve taxpayer service and modernize its information technology systems.
- Extending the period for receiving refunds when the IRS postpones the tax filing deadline.
- Expanding the U.S. Tax Court’s jurisdiction to hear refund cases.
- Restructuring the Earned Income Tax Credit (EITC) to make it simpler for taxpayers and reducing improper payments.
- Expanding the protection of taxpayer rights by strengthening the Low Income Taxpayer Clinic (LITC) program.