The Internal Revenue Service is inundated with the volume of returns yet to be processed and phone calls for assistance, and is working hard to remedy the situation. While there are many factors contributing to this, it is overwhelming to the agency, according to Stephen Mankowski, tax chair of the National Conference of CPA Practitioners, who attended a recent IRS meeting for stakeholders.
“The National Taxpayer Advocate reported they are working to remedy this in multiple ways. The level of service is at its lowest historically, with more calls coming in daily than ever,” he said.
“Hiring and training take time. The automated callback program has been successful, but the number of people in the queue is limited to the number of assistants available,” he said. “The number of calls coming in, particularly regarding the Child Tax Credit, are exacerbating the problem.”
“Paper returns have piled up — there are 5.5 million Form 1040s and over 4 million business returns that have been opened but not processed. The goal is that by year-end, the paper returns will be processed. However, there are an additional 4 million returns anticipated by mid-October,” he said.
National Taxpayer Advocate Erin Collins is empathetic, Mankowski commented. “She truly feels our pain. She understands the taxpayer issues that exist, and the problems getting through to the IRS. She’s dealing with a lot of calls from practitioners and taxpayers trying to get resolution on issues. It’s just a matter of not having enough bodies to do the work.”
It’s not a static situation, Mankowski emphasized, noting that while the service is catching up on returns already filed, more returns are coming in.
And it’s more than just having the money to hire additional personnel, he suggested: “Even if they had the money and had the people willing to work, they couldn’t just snap their fingers and put 50, 100 or 500 people to work manning the phone lines. It takes at least 12 to 18 weeks to train someone to answer and assist callers. They have to understand the systems, and be able to understand and interpret what’s going on.”
In some cases, they need to have people with better knowledge or information to help on practitioner lines, Mankowski observed. “But in a lot of cases, it’s easier to explain the issues to a practitioner than it is to taxpayers,” he said. “There’s a lot of training that is necessary to have someone able to assist all levels of taxpayers.”
The late December 2020 changes affected the 2021 filing season, he noted. “The reconciliation of the Economic Impact Payments is anticipated to be fixed within the computer system shortly, and they are hoping for the same with the Child Tax Credits. The IRS is looking to send out notices to taxpayers verifying their child tax payments, and the data is expected to also be available on the IRS portal.”
Other developments that were discussed at the meeting included the launch on July 18 of Tax Pro Accounts. “So far, over 37,000 sessions have logged into the accounts,” Mankowski said. “Nine thousand of these have initiated [power of attorney] requests, with 3,000 of those fully created and authenticated.”
A lot of the early users were “tire kickers,” according to Mankowski. “They might have been wanting to go through the motions. They had a general idea of how it works from watching the videos, but wanted to try out a dummy case just to test drive the system.”
The Secure Access Digital Identity, or SADI, was also launched with respect to the Child Tax Credits, with 4.1 million users seeking to gain credentials. SADI will be implemented into Tax Pro Accounts in November 2021. “The goal is that SADI will assist in allowing taxpayer authentication,” Mankowski explained.
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