National Taxpayer Advocate Delivers Annual Report to Congress

On January 12, 2022 National Taxpayer Advocate Erin M. Collins, the official “voice of the taxpayer” to both the IRS and Congress, released her 2021 Annual Report to Congress.

It’s not surprising that the report categorized 2021 as a very challenging year for both taxpayers and tax professionals. There were delays in processing millions of returns and since many taxpayers receive refunds, those refunds were also delayed.

These delays were caused by a very difficult 2021 for the IRS, with the pandemic impacting traditional workflow and the added responsibility of implementing the stimulus programs passed by Congress. Although the report credits the IRS with performing relatively well under the circumstances, that is little consolation to taxpayers and preparers who experienced delays and inferior service.

Ms. Collins expressed concern for the upcoming 2022 tax season, citing inadequate resources to efficiently process the existing backlog of amended income and payroll tax returns in addition to the upcoming 2021 tax year filings.

Her report indicates that the processing delays led to a number of problems for taxpayers and preparers, including:

• The IRS “Where’s My Refund?” webpage was not working properly and often could not answer that simple question.
• The IRS sent tens of millions of notices to taxpayers during 2021 and took an inordinate amount of time to process the responses to those notices, delaying tax return and refund processing.
• Telephone service was terrible. The IRS received a record 282 million calls but was only able to answer 32 million (11%). For those calls it did answer, the average wait time was about 25 minutes.

The annual report also outlines the ten most serious problems encountered by taxpayers in 2021. Those include processing and refund delays, challenges in employee recruitment, hiring, and training; inadequate telephone and in-person taxpayer service; and limitations in digital taxpayer communications, including e-mail among others.

Have questions or need assistance? The expert tax professionals at PP&Co are ready to help. Contact us at (408) 287-7911 or info@ppandco.com for more information.