October 7, 2020
Jessica L. Jeane, J.D.
Director of Public Policy and Communications
The IRS continues to work through its mail backlog, which consists of over 5 million unopened items, according to IRS Commissioner Charles “Chuck” Rettig. Notably, there are an estimated 2.5 million unopened paper income tax returns included within the backlog.
“We are doing everything we can to reduce this backlog, including providing relief for taxpayers who have sent us mail that was unopened for a period of time,” Rettig said during an October 7 House Oversight and Reform Subcommittee on Government Operations hearing. Additionally, the IRS continues to receive approximately 300,000 to 500,000 pieces of mail each week, Rettig noted.
According to Rettig’s written testimony provided to the National Society of Accountants (NSA) by the IRS, some of the following initiatives are taking place:
- For people who had tax refunds affected by IRS closures, it is paying interest on refunds. These payments, which can sometimes show up as a second deposit, average $18 for nearly 14 million taxpayers.
- The IRS is also crediting people in instances where there is unopened mail and they are making a payment. The IRS credits people on the date the mail was received, not the day the IRS processes the payment.
2020 Tax Filing Season
Rettig also spoke with lawmakers about the 2020 tax filing season, noting that is set records on January 27 when the IRS processed more than 2.275 million e-filed returns in an hour and at a rate of 631 submissions per second, without error. As of September 11, the IRS had received more than 158.2 million individual returns and issued more than 120.5 million refunds.
In related news, the IRS on October 7 issued IR-2020-231, reminding taxpayers that the October 15 deadline is fast approaching for those who requested filing extensions. To that end, Rettig, during Wednesday’s House panel hearing, encouraged taxpayers and practitioners to file 2019 tax returns electronically because of the continuous mail backlog.
Economic Impact Payments (EIP)
Additionally, Rettig told lawmakers that the IRS continues its efforts to reach individuals eligible for an EIP who have not yet received one. “[W]e mailed a letter to roughly nine million Americans who haven't received an EIP and didn’t file a return for either 2018 or 2019,” Rettig said. “These letters started being mailed in mid-September, and the mailings were completed by the end of the month. We performed an extensive internal analysis and found these are people who don't typically have a tax return filing requirement but had received Forms W-2, 1099s and other third-party statements.”
Moreover, the IRS announced in IR-2020-229 on October 5 that it has extended the EIP deadline to November 21. The later date provides an additional five weeks beyond the original deadline. Individuals who have not received a payment can register using the Non-Filers: Enter Info Here tool on IRS.gov.
Taxpayer First Act Implementation; IRS Modernization
Looking ahead, Rettig provided a glimpse of work the IRS is doing to implement the Taxpayer First Act (TFA) (P.L. 116-25). The IRS’s Taxpayer First Act Office (TFAO) was created in response to the legislation.
In February of this year, NSA submitted several recommendations to the IRS on how restructuring could benefit both the IRS and individual taxpayers, while also serving to facilitate and strengthen the relationships between the IRS and the tax practitioner community.
According to Rettig’s testimony, the TFAO is centered on six major themes, all of which help the IRS shape the foundational components of a new, holistic taxpayer experience.
- Expanded Digital Services: The IRS will work to provide an improved experience through self-service digital channels by building upon existing online accounts and introducing online accounts for tax professionals and business taxpayers and continue to provide traditional channels of communications.
- Seamless Experience: The IRS will guide taxpayers to the resources and communication channels that will resolve their issues most effectively and efficiently.
- Proactive Outreach and Education: The IRS will educate the taxpayer community by proactively providing information in the language, timing, and method taxpayers need or prefer.
- Focused Strategies for Reaching Underserved Communities: The IRS will provide a consolidated program to engage with historically underserved communities to address issues of communication, education, transparency and trust, as well as access to quality products and services.
- Community of Partnerships: The IRS will establish and facilitate a collaborative and interactive network of partnerships across the entire tax ecosystem and bring together existing efforts.
- Enterprise Data Management and Advanced Analytics: The IRS will create an Enterprise Data Management strategy that includes a cross-enterprise understanding of the customer experience, emerging needs and expectations, and operational data.
The IRS needs to "come of age" to be able to serve the people of this country in a manner with which they deserve to be served, Rettig told lawmakers. “We don’t want a tax administrator that is behind the times.”
The IRS’s TFA Report is expected to be submitted to Congress in December.
The core mission of the National Society of Accountants is to help tax and accounting professionals become more successful.
NSA presents this information in the interest of its members for information purposes only and is not intended to provide, nor should it be relied upon, as legal, tax, or accounting advice.