IRS closes in on final phase of challenging tax season
The IRS is heading into the final stage of a uniquely challenging tax season that has included delays and backlogs as a result of the coronavirus pandemic.
Thursday is the deadline for people who requested extensions to file their 2019 tax returns, and it comes just three months after the July 15 non-extension filing deadline, which had been pushed back from mid-April.
The IRS this year has faced the dual responsibilities of processing tax returns, while many employees were working remotely, and carrying out aspects of coronavirus relief legislation — most prominently, the stimulus payments sent to most U.S. households.
The IRS has made progress in processing its backlog of paper tax returns and getting stimulus checks to everyone who’s eligible, but it still has more work to do.
“Millions of people who desperately rely on the IRS to receive much-needed financial assistance to pay for medical care, groceries, housing, are still waiting for those refunds and stimulus checks,” Rep. Gerry ConnollyGerald (Gerry) Edward ConnollyJudge issues nationwide injunction against Postal Service changes House panel advances bill to ban Postal Service leaders from holding political positions Shakespeare Theatre Company goes virtual for ‘Will on the Hill…or Won’t They?’ MORE (D-Va.), the chairman of the House Oversight and Reform Subcommittee on Government Operations, said at a hearing last week with IRS Commissioner Charles Rettig.
The coronavirus took hold in the U.S. during tax-filing season, just weeks before the traditional April 15 filing deadline. The IRS extended that deadline to July 15, while also keeping the traditional extension deadline of Oct. 15.
The IRS directed most of its employees to work remotely in late March. Some employees have since returned to their worksites and have faced a backlog of tax returns and other mail to process.
March was also when President TrumpDonald John TrumpTwo ethics groups call on House to begin impeachment inquiry against Barr Trump relishes return to large rallies following COVID-19 diagnosis McGrath: McConnell ‘can’t get it done’ on COVID-19 relief MORE signed into law the $2.2 trillion CARES Act that authorized the stimulus checks of up to $1,200 per adult and $500 per child, the Paycheck Protection Program (PPP) that provides loans to small businesses and other relief initiatives that have required work from the IRS.
The combination of the extended deadline, office closures and new relief programs has required the agency to juggle many different tasks, leading to both criticism and praise.
Rettig said during last week’s hearing that as of Sept. 25, the IRS had processed more than 153 million individual returns and issued nearly 122 million refunds. He noted that the agency did this while also issuing stimulus payments and preventing cyberattacks.
Rettig said the agency had a backlog of about 5.3 million unopened pieces of mail — an amount that is significantly smaller than the size of the backlog in the spring — and that an estimated 2.5 million of those mailings are paper returns. The agency tries to prioritize processing tax returns and refunds when going through the mail, he said.
“Our people are working really hard,” said Rettig, who was appointed by Trump to serve a term that ends in 2022.
But lawmakers said during the hearing that even though most people have received their refunds, some of those who haven’t are those who have struggled the most during the pandemic.
“I do appreciate the effort, but we have a lot of people who are struggling,” said Rep. Jody HiceJody Brownlow HiceHouse rebuffs GOP lawmaker’s effort to remove references to Democrats in Capitol Pelosi must go — the House is in dire need of new leadership House Republicans investigating California secretary of state’s contract with Biden-linked firm MORE (R-Ga.), the top Republican on the Oversight and Reform subcommittee.
Connolly said the number of people with problems “may be a small percentage, but it’s real human beings and real needs.”
Rettig said that more than 160 million stimulus payments have been issued, and he noted that the Treasury inspector general for tax administration found in a report issued in June that the IRS correctly computed the payment amount about 98 percent of the time.
But there may be millions of low-income people who have yet to receive their payment, and reaching this group has been a major focus and challenge for the IRS.
“We have remained concerned about getting payments out to people who don’t normally file a return, including historically underserved communities of our nation,” Rettig said. He said the IRS has worked with partners to translate materials about the payments into more than 35 languages and have distributed these materials across the country.
The IRS in April established a web tool that non-filers can use to register for their payment. Last week, the agency extended the deadline for people to use that tool from Oct. 15 to Nov. 21.