IRS adds new ‘surge team’ as lawmakers fume over tardy refunds

Accounting

The Internal Revenue Service is expanding its capacity to process tax returns following criticisms from members of Congress about taxpayers waiting months to get their refunds.

The agency is adding a second so-called surge team to process a backlog of unprocessed tax forms filed in the past two years and is outsourcing some basic functions to help the agency finalize refunds more quickly, the National Taxpayer Advocate Erin Collins told a Senate committee Thursday.

The new surge team is in addition to the 1,200 employees that the agency is temporarily re-assigning to tackle the backlog.

The Internal Revenue Service headquarters in Washington, D.C.

Samuel Corum/Bloomberg

“These additional steps should reduce phone calls and eliminate the need for additional correspondence and more importantly reduce some of the taxpayer’s frustration,” Collins said.

The IRS also said on Thursday it is scrapping plans to close a processing center in Austin, Texas, which had been scheduled to be shut down in 2024. The announcement came after a watchdog report warned that the agency might need to maintain the processing capacity at that site.

The plans respond to a barrage of criticisms from both Republicans and Democrats that the IRS isn’t doing enough to process returns for taxpayers, some of whom are still waiting on refunds from years past. The agency has millions of unprocessed tax forms, a delay it attributes to closures of facilities during the coronavirus pandemic, budget cuts and outdated computer systems.

Senator Bob Menendez, a New Jersey Democrat, said during the Finance Committee hearing that his office hears regularly from people who have faced lengthy waits in getting their returns processed and correspondence addressed.

“My office has continued to receive calls about these issues each and every day. We’ve had thousands of calls since the pandemic began,” Menendez said. “The IRS touches more Americans than any other entity, public or private. We have to have an IRS that works.”

Senator Mike Crapo of Idaho, the top Republican on the committee, said that the IRS must do more to help taxpayers accurately pay their taxes.

“Many Americans have received incorrect or outdated information from the IRS, or have been subject to improper collections or other adverse actions simply because the IRS does not know they have filed a return or responded to a notice,” he said. “Many Americans cannot receive accurate answers to basic questions, like how long it will take to receive their tax refund or an answer to their correspondence.”

The IRS said this month it would suspend some automatic notices and collections letters until the staff can get through the backlog, a move that should ease some confusion for taxpayers.

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