The National Taxpayer Advocate’s Annual Report to Congress released on Jan. 11 says that the Internal Revenue Service (IRS) is in a better position now to improve its performance than it has been in the past few years.
The report from National Taxpayer Advocate Erin M. Collins details how agency efficiency was roiled during the COVID-19 pandemic, resulted in tax return back logs that have rolled over during that time.
“The bad news is that taxpayers and tax professionals experienced more misery in 2022,” the report says. “The good news is that since the close of the 2022 filing season, the IRS has made considerable progress in reducing the volume of unprocessed returns and correspondence,” stated the report.
“We have begun to see light at the end of the tunnel. I am just not sure how much further we need to travel before we see sunlight,” Collins said.
The report offers three key details that form the basis of some optimism for IRS operations in 2023:
- The IRS has largely worked through its backlog of unprocessed tax returns, even though it remains challenged with a high volume of suspended returns and correspondence;
- Congress has provided the agency with significant additional funding to increase its customer service staffing; and
- With the benefit of direct hire authority, the IRS has recently hired 4,000 new customer service representatives, and it is seeking to hire 700 additional employees to provide in-person help at its Taxpayer Assistance Centers.
The report lays out 13 recommendations that the Taxpayer Advocate said can play a vital role in changing improving its productivity. Chief among those is to hire and train more human resources (HR) employees.
“Ironically, staffing shortages in the IRS’s Human Capital Office (HCO) are one of the biggest obstacles to hiring and onboarding more employees. HCO, which coordinates all IRS hiring, does not have enough staff to review and approve new position descriptions, post job announcements, and screen incoming applications. Without HCO involvement, other IRS divisions cannot hire employees even when they have funding,” the report says.
Other recommendations include overhauling the agency’s website so it’s more user friendly, developing better voicebots and chatbots, and improving transparency.