The Inflation Reduction Act, which passed in 2022 without any Republican votes (no political party battle here), approved about $80 billion for the IRS over a ten year period. Democrats say the money is meant to help the IRS ramp up its enforcement efforts on high-income taxpayers as well as improve its archaic taxpayer services system. With an organization that receives such a large amount of money to improve the over 142,000,000 taxpayers tax return experience, a nonpartisan watchdog is essential to ensure funds are wasted. Hence, the Taxpayer Advocate Service. The Taxpayer Advocate Service works in two main ways – helping taxpayers with individual problems and recommending “big picture” or systemic changes at the IRS or in the tax laws. By law, the National Taxpayer Advocate must submit two reports to Congress each year. Call it a reality check.
Good news first. According to the report, the taxpayer experience vastly improved during the 2023 filing season. Indeed, IRS leaders say the funding boost is producing big improvements in services to taxpayers.
But not to downplay the positive, there is some bad news. According to the watchdog reports, there are extraordinary delays by the IRS in assisting identity theft victims, taking nearly nineteen months to resolve cases. Additionally, the backlog of unprocessed amended returns has quadrupled from 500,000 in 2019 to 1.9 million in October last year. And taxpayer correspondence cases have more than doubled over the same period, from 1.9 million to 4.3 million. Doubt it is a congressman’s return that is being delayed.
In actuality, the IRS is only as good as the Congressmen who support them. The federal tax collection agency originally received an $80 billion infusion of funds under the Inflation Reduction Act but that money is vulnerable to cutbacks. Last year’s debt ceiling and budget cuts resulted in $1.4 billion rescinded of funds along with a commitment to take $20 billion from the IRS. And the taxpayer still waits for his return.
Shout out to the Taxpayer Advocate Service for their continual work to protect the taxpayers money.
Today’s Fraud of The Day is based on article “For IRS, Backlogs and Identity Theft Problems Remain, but There Is ‘Cautious Optimism’ Watchdog Says” published by the U.S. News on January 10, 2023
The IRS is still too slow in processing amended tax returns, answering taxpayer phone calls and resolving identity theft cases, according to an independent watchdog within the agency.
While there is “cautious optimism” for an agency that has excavated itself from tens of millions of backlogged tax returns with new federal funding, the report states “the IRS has a tall mountain to climb to achieve its goals of rebuilding the agency, modernizing its systems, and providing the quality service taxpayers deserve.”