Taxpayer Advocate mid-year report

Taxpayer Advocate mid-year report
By David Zubler

National Taxpayer Advocate Erin Collins recently released her mid-year
report to Congress. The Taxpayer Advocate Service helps taxpayers resolve
problems with the IRS, makes administrative and legislative recommendations
to prevent or correct the problems and protects taxpayer rights.
The mid-year report analyzes the IRS’s effectiveness in processing original
returns, amended returns, taxpayer correspondence and answering taxpayer
telephone calls.
Erin Collins said, “In submitting this report, I’m finally able to deliver some
good news: The taxpayer experience vastly improved during the 2023 filing
season. The IRS caught up in processing paper-filed original Forms 1040
and various business returns; refunds were generally issued quickly; and
taxpayers calling the IRS were much more likely to get through – and with
substantially shorter wait times. Overall, the difference between the 2022
filing season and the 2023 filing season was like night and day.”
The IRS improved its processing of paper filed tax returns. According to
the report, there 13,300,000 unprocessed paper returns as of April 22, 2022.
That number dropped to 2,600,000 as of April 22, 2023.
The IRS was given credit for making significant improvements. However,
the IRS is still behind in processing amended tax returns and taxpayer
correspondence. Generally, employees in the IRS’s Accounts Management
function perform two functions. They answer telephone calls, and they
process taxpayer correspondence and amended returns. The correspondence
includes processing taxpayer responses to IRS notices and many types of
taxpayer requests, such as applications for Employer Identification Numbers,
a high percentage of Identity Theft Victim Assistance cases, and tax return
preparer authorizations.
The IRS’s Accounts Management has not made notable progress in reducing
its paper inventories over the past year. The inventory is just six percent lower
than at the same time last year. In April, it was taking the IRS 130 days
to process its adjustments cases. That represents a substantial improvement
from the 214 days it was taking last year, but it is still well above the IRS’s
standard processing time of 45 days.
The report says the IRS was much more effective in answering taxpayer
calls this year, “but [that] could only be accomplished by prioritizing the
phones over other IRS operations, and it resulted in greater delays in the
processing of paper correspondence.”
The report urges the IRS to prioritize information technology upgrades that
will improve the taxpayer experience. It says that although the COVID-19
pandemic was an unexpected development, the refund delays and service
challenges taxpayers experienced over the past three years would have been
substantially less severe if the IRS had better technology.
David Zubler is a nationally known tax accountant and Enrolled Agent that
resides in East Tennessee. He is the author of six tax books and a syndicated
columnist who has shared tax advice on podcasts and national TV and has
been referred to as America’s Tax Guru. He is the founder and president of
Your Tax Care. He represents clients nationwide before the IRS and provides
tax strategies, and tax education, including David’s one-minute tax tip radio
recordings at YourTaxCare.com. David can be reached at (865) 363-3019 or
by email at david@yourtaxcare.com.