By William R. Stromsem, J.D., CPA, Assistant Professor, Department of Accountancy, George Washington University School of Business
The IRS generally takes comments from the National Taxpayer Advocate as constructive criticisms. Recently, however, in her “Fiscal Year 2023 Objectives Report to Congress” NTA Erin Collins criticized the continuing backlog of unprocessed returns, saying, “Unfortunately, at this point the backlog is still crushing the IRS, its employees and most importantly, taxpayers.”
The Commissioner took strong issue with this backlog comment, saying, “The inventory numbers presented in the National Taxpayer Advocate report are neither the most accurate nor the most recent figures.”
In this unusual pushback in IR-2022-128, the Commissioner provided a much more positive report, defending the extraordinary efforts of the IRS and its employees over the last several months. To overcome the backlog, the IRS has taken several measures, including authorizing significant and ongoing overtime, creating special teams to focus solely on the aged inventory and hiring thousands of new workers and contractors. It has also streamlined its error resolution process.
As a result of these efforts, originally filed Form 1040 paper returns (without errors) filed during 2021 will be completed by the “end of the (June 17) week” with business paper returns to follow “shortly after.” As of June 10, the IRS had processed more than 4.5 million of the more than 4.7 million individual paper tax returns received in 2021. The IRS has also successfully processed the “vast majority” of tax returns filed this year (143 million returns). The streamlining of the error resolution process has resulted in a reduction in the backlog from 8.9 million on June 12, 2021 to 360,000 on June 10, 2022. The IRS news release mentions correspondence backlogs but does not give any details of progress.
You can judge the success of the IRS efforts and side with the Commissioner or the Taxpayer Advocate. However, the IRS is making extraordinary efforts and the Commissioner is understandably displeased with the continuing criticism as evidenced by his comments in the IR-2022-128.