WASHINGTON (AP) — Count Ethan Miller, 30, among that subset of Americans who are genuinely eager to file their taxes once tax-filing season opens on Monday.
The financial planner who lives in Silver Spring, Maryland, is eager to claim the new deductions that will come from buying a home. He also wants to jump into a tax season that promises to bring a lot of additional headaches and delays for filers this year.
“I’m trying to get a head start on my taxes as much as possible,” Miller said, adding that he wasn’t too worried about the forecast for further delays because he’ll be filing online and not waiting for a too much reimbursement.
Many other filers, however, could have more heartburn.
A shortage of IRS workers, a huge workload related to the administration of pandemic-related programs and stalled legislation that would have given the agency billions of dollars for faster processing of returns are will combine to cause taxpayer pain this filing season.
“The IRS currently has unacceptable backlogs and the customer service people are receiving is not what the American public deserves,” White House press secretary Jen Psaki acknowledged Friday. “The agency has not been resourced to adequately serve taxpayers in normal times, let alone during a pandemic.”
She pointed out that the problems predate the Biden administration and she urged understanding for beleaguered workers already struggling with huge backlogs. “It’s going to take work, time, and I think people need to understand that they need funding,” Psaki said.
Agency officials are already warning filers that “in many areas, we are unable to provide the amount of service and enforcement that our taxpayers and our tax system deserve and need,” as the said IRS Commissioner Chuck Rettig earlier this month.
Processing delays are to be expected, especially because the IRS says it is still working on 2020 tax returns.
In fiscal year 2020, the IRS processed more than 240 million tax returns and issued about $736 billion in refunds, including $268 billion in stimulus payments, according to the latest IRS data. . During the same period, 59.5 million people called or visited an IRS office.
Donald Williamson, a professor of accounting and tax at the American University in Washington, said he expects “weeks and weeks” of IRS delays in 2022.
“You can blame Congress or the IRS. I imagine they’re trying to do the right thing, but that just adds complexity,” he said. “My advice in 2022 is to file early, start tomorrow, and try to settle your taxes with a qualified professional.”
Williamson said he advises his clients to file electronically, and those expecting large refunds in the tens of thousands should expect longer delays. Most pending returns were filed on paper and are amended returns.
Filing deadlines have been extended over the past two years due to the pandemic. It is unclear whether this year the agency will offer similar leeway to taxpayers.
There will be a lot of new issues to go through this year.
For example, people who qualify for the child tax credit and who received advance payments throughout the year may get a lower refund than they would normally see.
People who did not receive stimulus checks for which they qualified under the pandemic relief program may still be able to claim a “recovery rebate credit” on their taxes.
On Thursday, the IRS released a list of “top 5 things to remember,” with suggestions for taxpayers on what documents to gather and what to do if their 2020 returns have still not been processed.
The IRS expects most taxpayers to receive their refund within 21 days of filing electronically, unless there are issues processing their return.
But many pitfalls remain, in part because of staffing issues at the IRS.
Tony Reardon, president of the National Union of Treasury Employees which represents IRS workers, said the agency “is having trouble recruiting because they’re up against Burger King or McDonald’s,” which offer a similar salary without forcing workers to “deal with confusing rules and regulations.”
As of Thursday, the agency’s careers website listed at least 180 open jobs, including tax clerks and examiners paid as little as $11 an hour. Of these, 42 positions were open to the public; most were only accessible to internal candidates.
A hoped-for $80 billion injection for the agency was included in versions of President Joe Biden’s proposed social spending package, but that stalled on Capitol Hill.
Reardon said the IRS “is having a hard time knowing how it is actually able to carry out its mission and that needs to be rectified.”
“I clearly think the taxpayer is bearing the brunt of it,” he said, adding that IRS employees are bearing the brunt of it “in horrific circumstances.”