Paying taxes can be stressful in the best of times, but 2020 worsened the fear and loathing for millions of Americans. The coronavirus pandemic shuttered local IRS offices where taxpayers can ordinarily seek help, while most people who tried to phone the agency were unable to get someone on the phone.
The IRS received more than 100 million calls last year, but only 1 in 4 callers got through to an IRS employee, according to a recent report from the National Taxpayer Advocate, a part of the agency that represents the public interest in dealing with the agency.
"Put differently, IRS employees did not answer more than 75 million telephone calls from taxpayers seeking help in complying with their tax obligations," Taxpayer Advocate Erin M. Collins wrote in her first annual report to Congress. "The IRS 'answered' 23 million calls by routing them for automated responses, while 39 million taxpayers simply hung up."
Funding and job cuts
The main factor behind the IRS' slack response: the agency's long-standing staffing problems, with the report finding that the IRS had about 20% fewer employees in 2020 than a decade earlier due to cuts in funding. Years of understaffing came to a head last year as the pandemic upended tax season, with the regular April filing deadline delayed because of the crisis.
Consumers also had plenty of questions about their stimulus checks, the federal c, that went unanswered. For the week of April 18 alone, 600,000 calls were placed to the IRS that went unanswered, the report found.
"The IRS needs more resources to hire employees and more resources to modernize its information technology," Collins wrote.
Although phone lines were reopened by late June, taxpayers still faced long wait times to reach an IRS representative, the Taxpayer Advocate found. "Improved customer service is not an option; it is a requirement. Americans deserve best in class service and top-quality tax administration," the report said.
Millions 2020 tax returns still unprocessed
Millions of taxpayers also experienced delays in receiving tax refunds, according to the report. Last year's problems were due partly to the pandemic, with the agency unable to process about 16 million paper tax returns in a timely fashion due to office closures.
"Paper tax returns and correspondence from taxpayers sat unopened in trailers for months, many taxpayers did not receive timely refunds [and] taxpayers could not get through to the IRS by phone," Collins noted.
These problems are ongoing, with the Taxpayer Advocate noting that more than 7 million individual returns remained unprocessed at the end of 2020. The IRS is urging consumers to file their 2020 tax returns electronically this year to ensure faster processing.
Even so, it's likely these problems will continue into 2021, Collins predicted. "The challenges created by the COVID-19 pandemic will continue through the 2021 filing season and possibly for months longer, affecting both the IRS and taxpayers," she wrote.
Audits of tax returns, which have fallen sharply in recent years, also declined due to the pandemic. Taxpayersto be audited by the IRS as they were a decade ago, researchers have found.
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