Expect delays

MYRNA BROWN, HOST: It’s Tuesday the 5th of April, 2022.

Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Myrna Brown.

NICK EICHER, HOST: And I’m Nick Eicher. First up: the tax deadline.

It’s just under two weeks away. So if you haven’t started working on this year’s return, you’d better get cracking, it’s not this Friday but next.

If you’re signing the front of a check—because you owe—you have to do that by April 15th. If you’re signing the back of one—because you expect a return—well, that signature might be awhile away.

WORLD’s Lauren Dunn explains why.

LAUREN DUNN, REPORTER: Peter Cook is a certified public accountant in Wichita, Kansas. He says his firm’s clients started experiencing processing delays two tax seasons ago – in 2020. They continued to see problems last year.

COOK: There were certain instances last year multiple instances where a return had to be paper filed instead of electronically filed, or there was some issue with the process in that return that necessitated a actual physical agent to look at that return. And when that happens, and then the processing of it can go from two weeks to six months.

Cook says one of his clients filed his return electronically and the IRS did receive it. But then the processing hit a snag.

COOK: Because of the amount of the refund, it necessitated actual physical review by a agent and instead of it being processed immediately, the ended up that it has dragged out and dragged out and dragged out, not just not just for a couple of months, but we are still about 10 months past the filing of that return, and he still has not received that refund yet.

And he’s far from the only one. In February, the Internal Revenue Service had a backlog of just over 23 million tax returns waiting to be processed. The agency has plans to hire as many as 10,000 more workers to help address the problem. But IRS Commissioner Charles Rettig says it will still be late this year before the agency can catch up.

Nina Olson is the executive director and founder of the Center for Taxpayer Rights. Before starting the center, she spent 18 years as head of the Taxpayer Advocate Service, an independent organization within the IRS.

She says COVID-19 brought work at the agency to a screeching halt.

OLSON: What the pandemic did was shut it down in the middle of the filing season. And, you know, it was very difficult for the employees who needed to actually be in a physical space to process payments, to process returns that were coming in on paper, etc. And it wasn't really set up well to do telework for a whole bunch of job descriptions. You know, there were some positions that were set up for telework, but a whole bunch of others weren't. And so 2020 was really a year when the IRS just got incredibly behind. And so it started 2021 with the filing season and 2021 already behind with millions and millions of returns that had not been processed.

While the pandemic exacerbated the backlog, Olson says some issues existed long before 2020.

OLSON: I've worked under, I don't know, four, or five commissioners, and everybody has worked, you know, the IT systems have been the devil of everybody. And it's a problem, because the systems are so old, that you're spending a lot of money, a lot of your budget, just maintaining them, keeping them operating, and trying to create, you know, connections between old systems and more modern, you know, software and technology and things like that. So you're Jerry rigging stuff, you know, it's requiring programming and upkeep, and it says it has a modernization plan. But every year, the progress on that is delayed.

Stimulus payments and child tax credit payments also created extra work for the agency. Olson says the IRS showed its strengths in mobilizing its resources to get payments to recipients as fast as possible. But during tax season, all of those payments can complicate filing a return.

Olson says the IRS does need to hire more employees, but it’s not easy to find the right people for the job.

OLSON: It's going to take time bringing people on board and training them. And you have to do background checks on everybody, because they are seeing people's personal financial information. I mean, the amount of information that the IRS has about people, in terms of their financial lives and their family structures is incredible. And so you don't want just anybody walking off the street and taking a job.

Given the delays, taxpayers might be hesitant to notify the agency of any errors or problems. Olson says, don’t be.

OLSON: What I've always felt is that people are afraid of the IRS, and therefore, they accept things or they're afraid to challenge what the IRS is saying. And the IRS has many, many people and its employees can get things wrong. And I don't want people to accept something if it really feels like it's wrong…If you get a letter from the IRS. One thing that I say to everybody is, don't ignore that letter. Because the worst thing you can do is nothing at all, the IRS will just, you know, so much of what it does is automated, that it just keeps rolling on. And that's really you just got to be a really smart tax consumer.

Accountant Peter Cook recommends filing electronically if possible to avoid running into delays.

COOK: So far this year, once again, there's this difference between electronically filing and paper filing your return. And for clients that electronically file their return we haven't had any issues.

But if you do face complications with your return and need to call the IRS, he has a few tips.

COOK: Not every time is equal, not every day is equal.Sometimes there's early in the morning I've had the most success. Other times, it's later in the week I've had the most success in terms of contacting the IRS. So look for non-peak times and days to call the IRS if you do have to contact them.

Reporting for WORLD, I’m Lauren Dunn.

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