If you’ve had a claim or any need to cross paths with the IRS in the past two years, you already know. While processing times and general operations were already slow as of 2019, the COVID-19 pandemic was a near-fatal blow to the organization. Nothing seems to be working properly anymore, with no way out on the horizon.
We had the opportunity to attend a lecture by Nina E. Olson, who has served as Director of the National Taxpayer Advocate for nearly 20 years. Who better to paint a clear picture of the state of the mess as we enter this new tax season? If you want to stop reading here, here’s the short conclusion: things are worse than ever.
What does that mean, exactly? The IRS has always managed to finish processing one tax year before moving on to the next. Always, except for the last two. In fact, while tens of millions of tax reports are being sent to the IRS right now, there is a backlog of 24M reports or documents to process. We are talking about documents that all require human intervention.
Frustrated by these delays and the lack of information, people call. Yet, only 11% of the calls received lead to an answer. We can tell you this from experience. Just getting the line to the IRS assistance line can take about 50 attempts. When you do get through, it’s an hour’s wait before you speak to someone. Landing on a competent agent able to address the problem is then far from guaranteed! Addressing a single file can therefore take a full day.
The real delays are as follows and could even get worse by 2022:
– Processing time for an ITIN application: 4 months
– Processing time for a paper return: 10-12 months
– Processing time for an amended paper return: 12-16 months
– Response time for other correspondence with the IRS: 10-12 months
The misery doesn’t end there. The IRS has a system for tracking the progress of applications online. However, as soon as human intervention is required, a file falls under a system called the “Error Resolution System”. It now takes three months before a file that lands in this system is even looked at by a human. That’s not even mentioning the response time of the IRS and the postal delays! Even worse, once a file lands in the ERS, no mention is made of it in the online system. In short, the application would be lost that the information will be the same… and that’s when the IRS hasn’t really lost it, which happens more often than ever.
The way out of the crisis? Massive additional funding to increase available staff. This was denied again last summer. Even with the proper budget, enough staff willing and able to work for the IRS must be found. The current employees at the processing centers are already there six days a week, working constant overtime. In short, for 2022, all indications are that the situation will only get worse rather than better.
Say a prayer for your U.S. tax preparer and arm yourself with a healthy dose of patience!
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