At Subcommittee Hearing, Members Highlight Constituent Struggles with IRS, Emphasize Need to Create a More Efficient Agency
Washington, D.C. (April 21, 2022)—Today, Rep. Gerald E. Connolly, Chairman of the Subcommittee on Government Operations, held a hearing to examine the operations and financial condition of the Internal Revenue Service (IRS), specifically how the agency will fare this tax season.
“Congress, at a minimum, must resource the IRS appropriately—and then hold IRS leadership accountable for making sure those resources are properly deployed to provide the American people the level of service they deserve from this vitally important agency,” Chairman Connolly said in his opening statement.
Members and witnesses discussed the IRS’s plan to address the backlog of more than 23 million pieces of correspondence, including tax returns, and whether the IRS is prepared for the 2022 tax season.
- “More than 195 million people called the IRS for help during the 2020 filing season, which is nearly four and a half times more calls than it received in 2019. Unfortunately, about 82% of those callers received busy signals or disconnections, or the taxpayers simply hung up out of frustration,” said Chairman Connolly. “The IRS, as of April 8, has a massive backlog of about 26.2 million tax returns and pieces of correspondence related to the 2020 tax season that require manual processing. We are asking the IRS to boil the ocean.”
- In his opening statement, Commissioner Rettig explained: “While the filing season has presented no major disruptions or surprises, we know we have a great deal of work to do in many other areas of the IRS. The IRS continues to focus on working to reduce paper correspondence inventory and process paper tax returns from 2021 as well as improve our response to an unprecedented level of phone demand—situations that have been compounded by the pandemic and related issues.”
- Ms. Collins reiterated the need to eliminate this backlog, saying: “Taxpayer service must improve. For that to happen, the IRS needs to eliminate the albatross around its neck, pay out those delayed refunds, get current on its work, and then return to improving taxpayer service and protecting taxpayer rights.”
Members and witnesses examined the IRS’s long history of resource and staff shortages and how these shortages, as well as the coronavirus pandemic, have strained the agency.
- "The severe financial, technical, and staffing problems at the IRS were predictable and a direct result of years of partisan hostility, reckless investigations, and unwarranted budget cuts from Republican majorities in Congress,” explained Chairman Connolly. “And today, as we head into this year’s tax season, the IRS is gasping for air.”
- In her opening statement, Ms. Collins explained: “A toxic combination of office closures early in the pandemic, inadequate staffing, antiquated IT, and the need to divert resources from our core work to administer three rounds of the stimulus payments, the monthly Child Tax Credit payments, and several financial relief programs has created an unprecedented balance between the IRS’s workload and the resources it has available to do the work.”
- In response to a question from Rep. Raskin about chronic staff shortages, Commissioner Rettig said, “The inability to have direct hiring authority to actually bring somebody on quickly was really just death to the agency. Congress rescued us on March 15 by giving us direct hiring authority for tax examiners and clerks.” He continued, “We’ve brought on a little over 2,500 now, and we’re going out with another round. So, staffing is really critical.”
Members emphasized that many Americans rely on their tax refunds to pay for necessities such as food, childcare, medication, and utilities, and shared stories from their constituents about the real-world impact of an ineffective IRS. Members stressed that the IRS must provide a clear plan to avoid collapse and prepare for successful processing this year and into the future.
- “Nearly 7 million taxpayers are still waiting for the IRS to process their tax returns from last year,” explained Rep. Porter. “Many taxpayers waited ten months or more for their refunds. And this is not an abstract issue—families need their tax refunds to pay their rent; small business owners need their refunds to keep their doors open. It is their money, and the government should promptly return it to them.”
- Chairman Connolly shared a video from constituent Caroline (Qunfen) Yan, whose 2019 paper tax return was incorrectly manually entered into the IRS system. Despite multiple efforts, she was unable to contact anyone at the IRS to resolve the issue and was then threatened with fines and other penalties. The Chairman asked Mr. Rettig if he supported and would implement an automated intake process, such as 2D barcoding, to help avoid this issue. Mr. Rettig agreed, explaining that the IRS needed funding to implement such technology.
- Mike Solomon, from Washington, D.C., explained in a video that he has made many attempts to contact the IRS via telephone and online to check the status of his 2020 refund, which would help pay for essentials for his three children. His representative, Congresswoman Holmes Norton, stated that Mr. Solomon was one of nearly 160 million taxpayers whose calls to the IRS were abandoned, disconnected, or so frustrating that they hung up. When asked why this is happening, Mr. Rettig stated that unprecedented taxpayer demands, limited technology, understaffing, and increasing responsibilities led to these problems. “We have not been able to upgrade, create, and bring on board technology,” Mr. Rettig said.