WASHINGTON- Internal Revenue Service commissioner charles rettig assured lawmakers Thursday that the agency will eliminate a backlog of more than 20 million unprocessed tax returns by the end of the year.
The backlog, which includes unprocessed returns from previous years and correspondence sent to the IRS but yet unanswered, will “absolutely” be cleared before December, Rettig told members of a House oversight panel.
Rettig’s assurance to Congress that the agency is working to resolve the problem comes just days after the IRS announced plans to hire 10,000 new employees to tackle the backlog. The agency expects to hire 5,000 of the employees in the coming months and fill the other 5,000 positions next year.
The IRS also is creating a 700-person surge team to process new returns. The agency is shifting employees to IRS processing centers in Austin, Texas; Ogden, Utah; and Kansas City, Missouri, to help handle historically high inventories of paper returns.
Rep. Judy Chu, D-Calif., who presided over the oversight hearing, called the news “very, very encouraging.”
“Each return represents an individual, a family, a business desperately awaiting needed refunds from last year,” she said.
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IRS officials blame the backlog on several factors. deep budget cuts that started around 2010 and continued over the following decade have drained the agency of the resources and the staffing it needs to enforce the nation’s tax laws.
At the same time, the agency has been tasked with implementing multiple revisions to the tax code and, in past two years alone, processing three rounds of stimulus checks that Congress directed to be sent to millions of Americans during the coronavirus pandemic.
President Joe Biden you have proposed pumping $80 billion into the tax collection over the next decade to help it hunt down wealthy tax evaders. Roughly half of that would be targeted specifically for the agency to ramp up its enforcement activities. Another $32 billion would be used for the development of information technology and other services that could enhance the agency’s enforcement prowess.
But the proposal is drawing resistance from congressional Republicans, banking groups and others who argue the additional resources could empower the IRS to unfairly go after average Americans. The Biden administration insists only those earning more than $400,000 a year would be pursued.
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A massive spending bill that Biden signed into law on Tuesday provided nearly $12.6 billion in funding for the IRS through September. The funding represents a 6% budget increase for the agency, but still fell far short of the 14% increase the Biden administration had sought.
Some Republicans are looking to cut the IRS even further. Florida Sen. Rick Scott, who is pushing an 11-point “Rescue America” plan for Republicans to campaign on in this fall’s midterm elections, advocates slashing the agency’s workforce by as much as 50%, which would make it harder to enforce tax laws.
Rettig warned that such steep cuts would cripple the agency.
“If the IRS budget was cut by 50%, you might be better off and save more money by just shutting it down completely,” he said. “We account for 96% of the gross revenue of the United States of America. How are you going to fund what we need to fund and what every American deserves? … Cutting our budget is not the right answer.”
Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS.
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George is Digismak’s reported cum editor with 13 years of experience in Journalism