IRS still has a sizable backlog of returns despite improvements, taxpayer advocate says

LAS VEGAS — After a hard 3 years for taxpayers, the IRS has made significant improvements. But there's inactive enactment to do, according to the National Taxpayer Advocate Erin Collins.

"This filing play has astir apt been arsenic adjacent to mean arsenic possible," she said, speaking astatine the American Institute of Certified Public Accountants' yearly conference successful Las Vegas this week.

However, contempt lawsuit work boosts, the bureau is inactive moving done a sizable backlog — including amended returns, filings successful suspense and different correspondence, she said.

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Collins said the IRS is presently juggling 3.7 cardinal amended returns, 6.8 cardinal "in suspense" with missing accusation and 5.3 cardinal pieces of correspondence. "Those are beauteous large numbers that the IRS is inactive dealing with," she said.

This season, the bureau has prioritized telephone work and answered much than 85% of calls from cardinal telephone lines successful little than 5 minutes.

"But it did travel astatine a cost," Collins said, due to the fact that telephone assistors process insubstantial returns during downtime from answering calls. "The occupation is, we are present backmost to a backlog of insubstantial correspondence and amended returns, akin to wherever we were a twelvemonth ago," she said.

Collins besides expressed concerns astir the agency's plans for caller programs amid the existent backlog.

In May, the IRS announced investigating for a free online nonstop filing system, with a aviator programme launching for immoderate taxpayers during the 2024 filing season.

Nearly three-quarters of taxpayers expressed involvement successful a escaped IRS-provided filing system, according to a 2022 survey cited successful the agency's feasibility report.

While Collins believes the IRS has the method capableness to instrumentality nonstop filing, she worries astir the timing. "IRS inactive is not retired of the spread that they person dug," she told CNBC.

"We cannot spell into the adjacent filing play with different backlog," she said. "We request to destruct that connection from the IRS' vocabulary.

"No much backlogs," she added.

Collins besides pointed to authorities taxation challenges, particularly for much than 40 states that trust connected national returns for residents' authorities filings. If you decouple those returns, it could origin issues for authorities taxation administration, she said.