IRS warns of bigger delays on tax refunds
Things at the IRS go from bad to worse, as the agency is now warning that its backlog of unprocessed returns from last year stands at more than 8 million – far bigger than a “normal” backlog of about 1 million.
What does this mean for you?
…the Internal Revenue Service will face “enormous challenges” during this year’s tax filing season, warning of delays to refunds and other taxpayer services.
In a phone call with reporters, Treasury officials predicted a “frustrating season” for taxpayers and tax preparers as a result of delays caused by the pandemic, years of budget cuts to the IRS, and the federal stimulus measures that have added to the tax agency’s workload.
Naturally, this has stoked calls to increase the taxman’s budget:
The Biden administration has pushed to beef up the IRS’s tax collection budget, hoping to spend $80 billion more on this area, in part because collecting that additional revenue will help it pay for other priorities.
Democratic lawmakers have also pushed to bolster the agency’s funding more broadly through the congressional appropriations process in a way that would offer more taxpayer services. Currently, the IRS budget is approximately $12 billion.
The House of Representatives approved a 14 percent increase to the agency’s budget as part of its budget proposal. But that effort is tied up in the Senate, and the federal government is on track to be funded at existing levels until February. Many Republicans oppose an expansion of the IRS’s budget.
Expanding the IRS budget, as Democrats want, isn’t to increase customer service, let alone increase the security of taxpayers’ private information. It’s to squeeze more revenue out of people.
Far better to enact fundamental tax reform – a flat tax or national sales tax – that bins the current wasteful, confusing, byzantine tax code and eliminates the need for super-sized IRS.