Crapo says Biden is funding huge IRS enforcement boost, ignores tax agency backlogs
According to Sen. Mike Crapo (R-Idaho), President Joe Biden’s proposed 2023 budget for the Internal Revenue Service funds more taxpayer audits at a time when millions of tax returns go unprocessed and customers calling the agency for help face long delays.
“For the third consecutive filing season, taxpayers are facing thorny customer service challenges as they attempt to meet their tax filing obligations. With tens of millions of 2021 tax returns yet to be filed, the most recent data we have from this year’s season is concerning, highlighting long-standing issues that IRS was not adequately addressed,” he told a Senate Finance Committee hearing. Crapo is the top Republican on the panel.
“For example, more than 60% of millions of items of taxpayer correspondence and amended returns remained in storage for more than three months, an increase of almost 30% from last year,” he said. -he declares. “The average wait time for the lucky few taxpayers who reach the IRS by phone is 28 minutes, an increase of almost 50% over last year.
“Dozens of taxpayers have had their refunds delayed while their return is suspended for various reasons. Millions of tax returns from previous years are waiting to be processed. The IRS’ handling of paper returns is an ongoing problem that, according to the National Taxpayer Advocate, dates back decades.
Instead of fixing customer service issues, Biden’s budget proposal is spending more taxpayers’ money on auditing more tax returns and tougher enforcement of the tax code, Crapo said.
“This year’s presidential budget request seeks to dramatically increase funding for law enforcement, and its ‘reserve fund’ space for irresponsible Build Back Better legislation would provide a truly massive injection of $80 billion. mandatory funding dollars, mostly application-based. The contingency fund could also accommodate the administration’s chilling proposal to monitor the flows of Americans’ bank accounts starting at just $600,” he said.
Finance Committee Chairman Sen. Ron Wyden (D-Ore.) agreed that the IRS is processing tax returns too slowly and leaving too many requests for help from clients unanswered, though he pointed out what he called “years and years of Republican cuts.” to the IRS budget as the cause of such problems.
Wyden said the IRS currently has a backlog of 12 million tax returns awaiting processing, and he said IRS agents only answer 11% of the millions of phone calls from clients. seeking help with their statements.
“The number of revenue officers at the IRS, the people who check tax returns, is now a third of what it was a decade ago. Officers collecting unpaid taxes are down by almost half. The agency has the same number of employees as it did in 1970, when the nation’s population and economy was a fraction of what it is today,” Wyden said.
“Look at the big picture. In the wake of years of Republican budget cuts, IRS customer service is struggling at best, wealthy tax evaders get away with breaking the law, and the burden of tax enforcement has shifted to workers who spend every day walking a tightrope.
The IRS annual budget for the current year is $12 billion.
Charles Rettig, the IRS commissioner appointed in 2018 by President Donald Trump, told the hearing that the tax agency was making significant progress in its ability to process electronically filed tax returns, but was still lagging behind. to adopt current technologies that could significantly speed up the processing of paper returns.
“Serving taxpayers remains the IRS’ most important priority, and funds provided by Congress have enabled us to implement many innovative strategies to reduce our current and projected unprecedented inventories and restore them by the way. the end of calendar year 2022, which is our commitment,” Rettig said.
“As for the 2022 tax filing season, we are off to a good start in terms of our tax treatment and the operation of our IT systems. Through April 1, we’ve processed over 89 million returns and issued over 63 million refunds totaling over $204 billion.
Rettig said taxpayers who filed electronically get refunds an average of 21 days later.
Pressed by several committee members on why the agency was slow to adopt barcode processing for paper returns, Rettig said the agency applied for such funding every year from 2013 to 2017 but did not. had not received it. There is seed funding in the Biden proposal to begin barcode adoption, he said.
The IRS chief thanked Congress for giving the agency direct-hire authority in the recently approved funding resolution to hire up to 10,000 new customer service representatives, but he said those positions initially only pay an average of $37,000 per year.