The IRS has cleared its backlog of millions of unprocessed returns from previous years and is completing its first “normal” tax filing season since 2020, Reuters reported.
Speaking to reporters at a press conference on Monday, IRS Commissioner Daniel Werfel credited part of the $80 billion appropriated to the agency by the Inflation Reduction Act for facilitating the purchase of new scanning equipment that enabled the digitization and processing of returns, Accounting Today reported.
The COVID-19 pandemic caused a three-month filing delay in 2020, followed by a one-month delay in 2021, according to Reuters. The additional complication of staffing shortages resulted in a backlog of 23.5 million individual and business tax returns by February 2022 that needed some form of manual processing, according to the National Taxpayer Advocate's office.
A U.S. Treasury spokesperson said that the IRS ended 2022 with a backlog of 1.4 million unprocessed individual and business returns and those were cleared by mid-March, according to Reuters.
Using some of the IRA funding, the IRS hired 5,000 new taxpayer service agents to cut down call waiting times, and with the new scanning technology, it was able to clear the backlog of all error-free returns, Reuters reported Werfel as saying, leaving only those with questions, audits or other issues to be resolved.
"This marks a special time for the nation with the arrival of the tax-filing deadline," Werfel said at the press conference, as reported by Accounting Today. "This was a big year for the IRS in many ways. The agency really had its hands full during the pandemic, handling three rounds of stimulus payments and many other changes needed to support our country and our fellow citizens. This is really the first tax season we've had since 2019 where the IRS and the nation were on normal footing, so this was a test of the IRS, and I'm pleased to report that the IRS delivered a solid 2023 filing season by any measure. You can see this progress in every aspect of our operations. The IRS stepped up to help taxpayers in many different ways this tax season. The IRS has answered more calls from taxpayers seeking our help, provided more in-person assistance and offered more online."
The Treasury Department issued a Filing Season 2023 Report Card that found that the IRS significantly improved its service. In particular, the report lauded the IRS for achieving an 87 percent level of service, answering 2 million more calls through live assistance, and cutting phone wait times by 85 percent.
“This tax day marks an important milestone at the IRS," Deputy Secretary of the Treasury Wally Adeyemo said during the press conference. "Thanks to the Inflation Reduction Act resources, we have dramatically improved services this filing season. IRS employees have shown that when they have the resources, they will provide the services they've always wanted to provide to American taxpayers. Under the vision detailed in the strategic operating plan, taxpayers will be able to seamlessly interact with the IRS in the way that works best for them: on the phone, in person and online. This filing season, the IRS has made great strides in all three areas as shown through the brand new data we're releasing today. First, the IRS has achieved an 87 percent level of service, exceeding Secretary Yellen's ambitious goal of 85 percent. It's important to remember how this stacks up to last year, when we were able to perform at less than 15 percent. IRS customer service representatives answered 2 million more calls and cut waiting times by 85 percent this year. We've cut it down to four minutes from 27 minutes. That's better than most companies can achieve. Factoring in taxpayers served by automated phone applications, the IRS actually achieved a 93 percent level of service."