Why Won’t the IRS Talk to Me?
It is always frustrating when you need to talk to a person, for any reason, and they cannot or will not respond. It is even worse when that lack of a response is something that is time-critical, and doubly so when it may cost you money. Whether you are trying to file your income tax returns with the Internal Revenue Service (IRS), respond to a notice, check on a refund or just provide them with information that they demanded, and they will not pick up the phone, you are justifiably upset. When this happens continually for days or weeks, the distress turns to anger, as you try to do something that you thought would be fairly easy, and it is not.
Welcome to interacting with the IRS in 2022. The IRS is still dealing with the massive backlog caused by the shutdown from the 2020 pandemic, the ripple effect that had, and continued to have, on their processing ability and speed all through 2021 and especially in 2022. Additionally, to assist in increasing their response ability, they projected hiring an additional 5,500 new agents for the Processing Division to help speed things along. They hired only 500. It has been reported, by the IRS, that not only did they not reduce the backlog and the wait time on phone calls, but they actually fell further behind. Phone calls answered fell over 50% from the previous year and calls successfully handled, once answered, fell from 27% to under 20%. Many callers stayed on hold for hours only to have the IRS disconnect them after a prescribed wait period. So, the number of taxpayers helped by the “Helpline,” as opposed to either not getting through or being told they could not be assisted, decreased from 1.2 million in 2021 to a mere 500,000 in 2022.
If you are waiting on a refund from a paper-filed return, or an amended return, you should also expect an unusually long wait. The IRS reported that as of mid-March of 2022, there were approximately 4.5 million paper returns waiting to be processed and 2.2 million amended returns. That is up from the same period in 2020 when the unprocessed filings were 183,000 and 110,000 respectively. We are probably not going to see that number come down substantially in the near future. Finally, the IRS reports that it currently has paper correspondence, the primary means of communicating with them, that is not even opened, in excess of 500,000 and another 5 million pieces that are being processed. It was revealed just last week that the IRS destroyed over 30 million unprocessed informational returns without inputting them into their system. This caused an outcry from tax preparers and taxpayers alike. Please note that these forms (such as 1099s) directly supported the amounts put on income tax returns but were not returns that tax would be due on (such as Form 1040). Nonetheless, it is hard to require taxpayers to fulfill their filing obligation when the IRS cavalierly destroys the returns.
All of this is not to condemn the IRS but rather to put you, the taxpayer, on notice that they are not back to normal operations, and if your refund is taking longer than expected, that is not unusual. Likewise, if you have an issue before the IRS that has been ongoing, it will take much longer than pre-COVID-19 communications with them to have it resolved. It is important to note that calling the IRS will not speed it up, and the person who answers probably cannot help you as they may not have access to the information. This is due to their software systems being over a decade out of date. Additionally, note that much of what is stated above is equally true of the current situation for the State of New York and many other states. So, if you are waiting on the tax agencies, for any reason, know you are not alone, and you should not allow the delays to lead to frustration.
Contributing Author: Joseph A. Hardick, CPA, CCIFP, is a tax partner who has over 38 years of experience in all areas of individual and corporate income tax preparation and planning. Joe specializes in corporate tax and tax planning for manufacturing and construction companies, and he has consulted on numerous areas of income and estate tax planning for high-net-worth individuals.