The agency's top watchdog called last year's tax filing season the most challenging ever experienced and warned this year could be worse.
Last year was the"most challenging year taxpayers and tax professionals have ever experienced," the Taxpayer Advocate said Wednesday in its latest annual report to Congress as the IRS gears up for the start of tax filing season on January 24. The top agency watchdog warned the agency is in crisis.
"The IRS is in crisis and needs to apply resources to its core mission – processing these returns and paying the corresponding refunds," the report stated. Adding to the complexity heading into the new tax filing season, taxpayers who received advanced monthly child tax credit payments and stimulus checks last year will also need to reconcile those, so processing and refund delays experienced last year could be"as bad, and potentially worse, in 2022," the report said.
The report points out that issues at the IRS are not only due to the pandemic but also a direct result of a diminished budget over the past decade that has led to inadequate staffing. Over the past decade, the IRS's budget has been slashed by nearly 20% including the adjustment for inflation. At the same time, the IRS has lost more than 33,000 full-time employees between 2010 and 2020, including 13,4000 enforcement personnel.
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