In a letter to legislators on Thursday, Internal Revenue Service Commissioner Charles Rettig said that the agency will clear a backlog of more than 20 million unprocessed tax returns.
Deputy Commissioner Rettig told members of a House oversight group that the backlog, which includes unprocessed tax returns from prior years and communications addressed to the IRS but not yet responded to, will “definitely” be completed by the end of the year.
Rep. Rettig’s pledge to Congress that the IRS is trying to remedy the situation comes just days after the IRS announced plans to hire 10,000 extra staff to help reduce the backlog of taxpayers’ taxes.
The agency plans to hire 5,000 new personnel in the next few months and fill the remaining 5,000 posts by next year.
The Internal Revenue Service also puts together a 700-person surge team to handle incoming returns. To deal with historically high inventories of paper tax returns, the IRS is relocating staff to IRS processing facilities in three locations: Austin, Texas; Ogden, Utah; and Kansas City, Missouri.
According to Rep. Judy Chu, D-Calif., who presided over the oversight session, the news was “very, extremely promising.”
According to the tax preparer, every return represents an individual, a family, or a business urgently anticipating returns from the previous year.
IRS officials attribute the backlog to a variety of issues. Deep budget cuts that began in 2010 and persisted over the next decade have depleted the agency’s resources and workforce, making it unable to enforce the nation’s tax laws.
Aside from that, it is responsible for overseeing the implementation of several changes to the tax code and processing three rounds of stimulus checks that were instructed to be issued to millions of Americans during the coronavirus outbreak during the previous two years alone.
President Joe Biden has recommended investing $80 billion in tax collection over the next decade to aid the government in tracking down wealthy tax evaders.
Approximately half of that amount would be allocated directly to the agency to increase its enforcement actions. The development of information technology and other services that might improve the agency’s ability to enforce its laws would get an additional $32 billion.
However, Republicans in Congress, banking interests, and others are opposed to the idea, claiming that the increased resources will enable the IRS to target common Americans and businesses disproportionately.
According to the Biden administration, only individuals earning more than $400,000 per year will be targeted for deportation.
The Internal Revenue Service received roughly $12.6 billion in financing through September as part of a large budget deal signed into law by Vice President Joe Biden on Tuesday.
The cash marks a 6 percent boost in the agency’s budget, but it falls well short of the 14 percent increase that the Biden administration had sought for the agency in question.
Some Republicans want to shrink the Internal Revenue Service even farther. In his 11-point “Rescue America” plan for Republicans to campaign on in this fall’s midterm elections, Florida Sen.
Rick Scott pushes for reducing the Internal Revenue Service’s personnel by as much as 50 percent, which would make it more difficult to enforce tax rules.
Rettig expressed concern that such drastic cuts would bring the agency to its knees.
“If the IRS budget were reduced by half, it’s possible that you’d be better off and save more money by simply shutting it down,” he suggested. “We are responsible for 96 percent of the gross domestic product of the United States of America,” says the president.
How are you planning to get the funds to provide the programs we need and deserve every American? It is not the best solution to reduce our spending.