IRS PROMISES A SMOOTHER 2023 TAX SEASON
That’s In Contrast to the Challenges of the Last 2 Years
If you weren’t frustrated and inconvenienced by inefficiency in responses by the IRS, certainly you know one or more taxpayers who have … or heard of the considerable backlog in unprocessed returns and unissued refunds for the past two tax years. According to the U.S. Government Accountability Office, “Partly as a result of the COVID-19 pandemic, IRS has faced significant return processing backlogs and a decline in customer service since 2020”.
That said, the IRS is projecting less frustration for both taxpayers and the Agency this tax season. There is evidence that operational improvements have been in the works for months and were implemented effective with the official opening of the 2023 tax filing season on Monday January 23.
In a statement by acting IRS Commissioner Doug O’Donnell, “This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act. We’ve trained thousands of new employees to answer phones and help people. While much work remains after several difficult years, we expect people to experience improvements this tax season.”
So, the expectation is this year should be a better experience for taxpayers, with the IRS having:
- Received additional funding,
- Added 5,000 customer service representatives to help answer phones and provide other services,
- Reduced a large backlog of tax returns that handicapped the agency.
The IRS has cautioned taxpayers with the following: Many different factors can affect the timing of a refund after the IRS receives a return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a 2022 federal tax refund by a certain date, especially when making major purchases or paying bills.
Now let’s put these predictions in perspective from the viewpoints of both the National Taxpayer Advocate and the Director of the Professional Managers Association, representing IRS managers and non-bargaining unit employees.
Keep in mind that choosing the standard mileage rate is optional. Taxpayers retain the alternative to calculate the actual costs of operating their vehicle if it has been used for business more than 50% of the time. That said, the standard rate generally must be used in the first year the car is operated for business use as described above. In subsequent years, either the standard mileage rate or itemized expenses may be preferred.
National Taxpayer Advocate (NTA)
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS. Its stated purpose is to ensure that every taxpayer is treated fairly and understands their rights. TAS staff advocates are prepared to help taxpayers to deal with otherwise unresolved tax problems.
The National Taxpayer Advocate reports to Congress annually on the prior tax year’s challenges at the IRS … including recommendations to remedy any problem issues. In her report, Advocate Erin Collins presents two contrasting observations.
- “The bad news is that taxpayers and tax professionals experienced more misery in 2022.”
- “The good news is that since the close of the 2022 filing season, the IRS has made considerable progress in reducing the volume of unprocessed returns and correspondence.”
As evidence of the second point above, the IRS has slashed its 2022 unprocessed backlog of 4.7 million individual returns, 3.2 million business returns and 3.6 million amended returns … down to roughly 400,000 individual returns and about 1 million business returns.
Given this progress, the report finds the IRS is “poised to start the 2023 filing season in a stronger position.” With that optimism, Collins also cautions that improvements won’t happen immediately. “As employees are trained and report for duty, I expect we will start to see improvements in service, probably by the middle of 2023.”
In summary, Collins wrote, “We have begun to see the light at the end of the tunnel. I am just not sure how much further we have to travel before we see sunlight.”
Professional Managers Association (PMA)
Chad Hooper is Executive Director of the PMA. He commented on the conclusions presented in the NTA report to Congress.
“The latest National Taxpayer Advocate report underscores the importance of consistent dedicated funding for the IRS. In the last year, the IRS has leveraged additional funding and new authorities to reduce the backlog and onboard new staff. These improvements make a real difference for taxpayers and set the nation up for a less stressful filing season.
Still, it will take more than one year to rebound the IRS from a decade of budget cuts and staff reductions. We urge Congress to heed the progress that has been made and continue rebuilding the IRS’s capacity to serve taxpayers.”
We are less than a month into the period that 2022 tax returns were accepted for processing
So, let’s see what happens between now and the tax filing deadline of Tuesday, April 18.
