Letter to Janet Yellen, Secretary of the Department of the Treasury, Charles Rettig, Commissioner of the Internal Revenue Service - Joyce Calls on Treasury, IRS to Address Processing Backlog

Letter

Dear Secretary Yellen and Commissioner Rettig:

I write to express my serious concern about backlogs at the Internal Revenue Service (IRS) and to request answers on how you plan to manage those backlogs during the 2022 tax filing season. Prompt and efficient processing of tax returns is important to businesses and individuals alike, especially those expecting a refund or penalty abatement. The uncertainty brought on by these delays and backlogs places a real strain on American families and businesses, particularly those living on the margins.

On November 15th, 2021, I received a letter from the Taxpayer Advocate Service stating that they would suspend efforts to assist my office in resolving cases where the IRS is delayed in processing amended returns. This leaves my constituents looking for an update on the status of their months-delayed return feeling completely helpless. Unfortunately, many taxpayers have come to expect this feeling of uncertainty over the last two years.

In a statement released on January 25th, 2022, Treasury Department officials admitted that "some taxpayers will face delays, as the IRS is entering filing season with a backlog of returns and correspondence left to process that is larger than the normal amount…" This admission understates the severity of processing delays at the IRS. The National Taxpayer Advocate's 2021 Report to Congress commented that "2021 was the most challenging year ever for taxpayers…processing backlogs led to long refund delays…telephone service was the worst it has ever been."

This is creating real uncertainty for taxpayers. One of my constituents has consistently received notices from the IRS he is late on quarterly tax payments, despite him making those payments on time. My office confirmed with the Taxpayer Advocate Service (TAS) that his payments were made on time; TAS explained that the taxpayer was receiving these automated messages from the IRS because of the processing backlog. This confusing and stressful situation represents just one of the dozens of inquiries my office receives about difficulty with the IRS each month.

I recognize that the pandemic has created unexpected challenges for Treasury and the IRS, including COVID-19 related staffing shortages. I also know that IRS is working with an outdated IT system, which has hampered its processing capability. I stand ready to work with you to address both problems.

I am not, however, enthusiastic about Treasury's recent wide-ranging proposals to transform the IRS into an overbearing agency much more involved in the lives of ordinary taxpayers. Treasury has proposed providing the IRS with as much as $80 billion in additional funding over the next decade, in part to deploy over 80,000 new agents. Treasury officials envision that this funding will bolster its compliance capabilities and have even proposed a new requirement for reporting on every American bank account with $10,000 of aggregate inflows or outflows in a year.

Treasury has used the pandemic related delays to justify this radical and expensive transformation of the IRS. Americans do not need the IRS to burden them with additional unwarranted surveillance and auditing. They simply need the IRS to manage its current workload effectively and on time. Rather than releasing more statements on why Congress should provide the IRS with tens of billions more dollars for enforcement, I ask that Treasury work with the IRS on a plan to reduce the processing backlog the IRS currently faces.

As the 2022 tax filing season is already underway, with Tax Day less than three months out, this challenge requires a response in the immediate future.

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