IRS preparing for hectic tax season
CNN– As we get closer to filing our taxes, the IRS warns this tax season is going to be messy. The Treasury Department says pandemic-related issues and budget constraints may lead to a delayed tax refund, and tax professionals are bracing for any potential issues.
The IRS blames staff shortages for creating a nightmare scenario, saying it might have one million returns backlogged, but the number this year is “several times worse.” The IRS also says it needs more money. It’s an issue the agency’s commissioner raised before Congress at a hearing last year, saying that while the tax code has grown more complicated, the funding has stayed the same and call centers can’t keep up.
The IRS says it was unable to answer two-thirds of the calls it received last year, and processing centers for paper tax returns were closed for much of the pandemic. All this adds to an already complicated tax filing year, with COVID-19 relief and increased child tax credits.
What does this mean for you? Tax experts recommend you file early. The IRS begins taking returns on January 24. That’s about two weeks earlier than last year. Also, file electronically. Experts say filing paper forms is going to add time. This year’s deadline is April 18 for most filers.
Meanwhile, the Biden administration wants $80 billion more over the next decade for the IRS to hire staff and upgrade technology. That’s part of his Build Back Better bill, which is currently stalled in Congress.