WHAT IS GOING ON OVER THERE?

We have been experiencing long delays in responses from IRS regarding amended returns, correspondence, ERTC refunds and paper filed returns.

This could effect you if you have an IRS problem that needs to be resolved or if you are waiting for a refund from the ERTC or even a refund from a normally filed tax return.

The mid-year report to Congress released in June found the IRS reduced its backlog of unprocessed paper-filed original tax returns from 13.3 million to 2.6 million.  However, the report also found the IRS is still behind in processing amended tax returns and taxpayer correspondence.

Even though there has been improvement in response time since the Covid related problems, an unconfirmed report stated that there are still trailers around the country packed with unopened mail.

Additionally, identity theft and fraudulent refunds have been such a big problem that the IRS is instituting new procedures to identify questionable returns.  This causes further delays.

Some procedures the IRS has instituted to resolve identity theft problems are causing returns that were filed to be put on hold and not be processed.  So if you call for the status of your refund, their records will show that you have not filed a return.  Yikes.

Another example we encountered recently of incompetence at the IRS is of a large tax payment sent to the IRS with the taxpayer’s spouse’s social security number clearly written on the check but it never got credited to the joint tax return.  The money just sat in limbo and the taxpayer kept getting tax due notices.

Of the roughly $79 Billion in funding the IRS received under the Inflation Reduction Act, only $3.2 Billion was allocated for taxpayer services and only $4.8 Billion was allocated to business systems modernization.  In late May, the debt limit deal in the Fiscal Responsibility Act of 2023 and a related side agreement reduced the IRS funding level from $79 Billion to $58 billion.