December 7, 2022

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A Evaluation of Preferrred Tax In Resolving Tax Debt

The Nationwide Taxpayer Advocate launched their midyear report back to Congress. Optima Tax Aid critiques the details of the report. 

Unprocessed Paper Returns 

A significant concern expressed within the midyear report was the backlog of unprocessed paper tax returns. The 21+ million returns that haven’t been processed imply tens of millions of taxpayers awaiting a tax refund. In latest months, the IRS has solely been in a position to course of about 205,000 paper returns every week. As a way to clear the backlog, the IRS would want to course of over 500,000 paper returns per week. This backlog has affected many taxpayers, from people to companies. There are even some who weren’t required to file based mostly on their revenue, however nonetheless filed to assert sure tax credit. For a lot of, the delay was sudden and created monetary burdens, particularly in the event that they depend on tax refunds to cowl bills every year.  

Correspondence Processing Delays 

One other concern expressed within the TA’s report is the extreme delay in processing correspondence between the IRS and taxpayers. As of late, the IRS takes greater than thrice as lengthy to course of taxpayer responses to IRS notices. Even worse, the lengthy processing occasions leads to delays in receiving tax refunds. Most taxpayers who obtain an IRS discover must wait over a yr to resolve their situation with the IRS and obtain their tax refund. That is additionally the case for the 336,000 taxpayers who have been victims of identification theft final yr.  

Phone Delays 

Regardless that the IRS has urged taxpayers to reap the benefits of utilizing on-line sources to reply primary tax-related questions, they’re nonetheless receiving a excessive quantity of cellphone calls. Throughout the 2022 tax submitting season, just one in ten calls have been answered by an IRS agent, and the typical wait time was almost half-hour.  

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Targets For the Subsequent Fiscal Yr 

To wrap up the report, the Nationwide Taxpayer Advocate listed 14 aims for the upcoming yr. A few of these embody: 

  • Automating the processing of paper returns utilizing new scanners, so IRS staff do not must key in every digit on the return 
  • Lowering obstacles to e-filing tax returns to minimize the quantity of paper returns that must be processed 
  • Bettering IRS hiring and coaching 
  • Bettering phone service