How Well Did the Internal Revenue Service Do?

             The National Taxpayer Advocate is required to issue a report to Congress on how the Internal Revenue Service (IRS) is functioning. This would include positive points and where they need to improve. How do you think the IRS did in the tax filing season of 2021?

          The IRS completed 136 million income tax returns and issued 96 million refunds. This is very similar to what was done in 2019. (The year 2019 is used as a comparison because nothing can ever compare to 2020.) These efforts are made more impressive by the fact that the IRS also issued 3 rounds of Economic Impact Payments within 15 months. With this encouraging news, there are some areas that are in need of improvement.

          There is currently a backlog of 35 million individual and business tax returns that need to be processed. Almost half of them are on paper. Pandemic related rules that restricted employee access to IRS facilities kept employees from working on them. This is another reason to file electronically. Many Taxpayers are waiting for their tax refund or credit which will not be granted until their tax return is processed. The phone service received its worst rating ever. There were 167 million calls made to the IRS during the filing season this year, and only 7% reached an actual person. This volume of calls is 4 times greater than what was seen in 2019, but this is a problem that must be solved. The pandemic may have highlighted existing issues, and paved the way for finding solutions to them.

Comments

Post a Comment

Popular posts from this blog

The Start of Tax Season

        The Internal Revenue Service ( IRS ) has announced that the beginning of tax season will be January 27, 2025. It would be best to organize financial and tax related documents now. It will simplify the filing process and reduce overall stress. However, it must be stated that for many of us, these times are anything but simple.         The fires across the Los Angeles area have forever changed so many lives. For this reason, LA County has been declared a federal disaster area. That has allowed the IRS to postpone the filing deadline to October 15 . This allows for those impacted directly by the fires to focus on what is most important right now and work on rebuilding their lives one step at a time.
Read more

Access to Funds During a Disaster

             There are many things that go through the minds of individuals and families during a disaster. One of the greatest concerns is how they can provide for their needs. This is especially true if they have been displaced or have lost a source of income. That is the situation of many in LA County right now. One source of relief that some may not think of is an Individual Retirement Account ( IRA ). Usually when taking an early distribution or withdrawal it would be limited and taxed. When it comes to a disaster situation, some of these things can be waived. This would only apply to those taxpayers who qualify. A person could qualify if they are displaced from their home, if their home is significantly damaged, or if they have temporary or permanent income loss. This could allow them to avoid the tax now and give them three years to pay back what is withdrawn. Check with your qualified tax professional to see if this is an option for you....
Read more

Choosing the Right Tax Professional

             Now is the time to make an appointment with your tax professional. It’s early in the tax season, so filing will usually be less stressful. That is especially true if you are returning to your regular tax professional. What if you are looking for someone new? Then starting early is absolutely essential. There should be a bond of trust between a taxpayer and their tax professional. This is needed because that person is entrusted with sensitive and personal information of their clients. In reality trust and respect are earned over time. How can someone choose the right tax professional for themselves right now?           There are many tips that can help in the search for a new tax professional. Making price the most important factor is not always best. If you pick a tax professional because they are the least expensive, remember that you often get what you pay for. Make sure to pick a preparer who is available th...
Read more