WASHINGTON — At the Internal Revenue Service’s sprawling Kansas City, Mo., processing center, teams of clerks earning $15 per hour work through the night, trying to help the agency clear a backlog of more than 20 million tax returns that are a year overdue.The conditions are subpar: Scanners sputter, forcing workers to enter data by hand, staplers are scarce and piles of tax documents overflow from carts.“The general theme for the time I’ve been there has been chaos,” said Shawn Gunn, a clerk in the receipt and operations group at the I.R.S. who started working at the facility in Kansas City last June and is transitioning to become a tax examiner.What’s happening in Kansas City provides a window into the problems plaguing the I.R.S., which is mired in a political and logistical mess that has frustrated taxpayers, angered lawmakers and put a key source of funding for President Biden’s economic agenda in jeopardy.Officials have warned of another rocky tax filing season ahead, saying it could be a “very frustrating tax season for both tax payers and tax professionals.” Democrats have pointed to the tumult as evidence that the agency needs more funding. Mr. Biden has called for investing $80 billion in the agency over a decade to help crack down on tax cheats, estimating that would raise $400 billion in tax revenue.But tax-averse Republicans, who have spent years cutting the agency’s budget, have seized on the I.R.S.’s problems as proof it should not be given more money or responsibility, with at least one lawmaker calling for the tax collector to be abolished.Much of the agency’s current woes can be traced to those budget cuts, which have eroded the agency’s ability to function at a critical moment. Staffing shortages and antiquated technology have collided with a pandemic that kept much of the agency’s work force at home while the I.R.S. was turned into an economic relief spigot responsible for churning out checks and other stimulus payments to millions of Americans.The agency’s work force of about 75,000 is the same size as it was in 1970. Its enforcement staff has fallen by over 30 percent since 2010, and audits of millionaires have declined by more than 70 percent. And its budget has declined by nearly 20 percent, when accounting for inflation, during the last decade.At the same time, the tax code has become more byzantine, and the number of individuals filing tax returns has grown by about 7 percent, according to the Center on Budget and Policy Priorities. The federal government has had to wrestle with well-financed corporations using complex tax avoidance maneuvers and the rise of digital currencies, which have made transactions more opaque and harder to tax.“It’s clearly been starved,” said John Koskinen, who was I.R.S. commissioner during the Obama and Trump administrations. “Now the chickens are coming home to roost.”The I.R.S. is now beginning to try to recruit new staff. It recently secured hiring authority from the United States Office of Personnel Management for 10,000 positions, according to a person familiar with the matter, as it works to clear the backlog of returns. The funding for the new hires, who will be brought on over two years, comes from the existing I.R.S. budget.The I.R.S. expects to process 160 million 2021 tax returns this year. About 90 percent of those are filed electronically and flow relatively smoothly through its systems. But about 24 million paper tax returns, amended filings from previous years and other mail correspondence continue to clog its creaky systems and represent what the National Taxpayer Advocate, an independent watchdog within the I.R.S., describes as the agency’s “kryptonite.”Much of that paper flows through Kansas City, which is the agency’s primary paper processing center. Housed in the city’s old post office building, the center is set up like a giant warehouse, with people working at long tables and in cubicles as shipments of filings are delivered. Machines slice open envelopes that then must be stamped by hand and recorded into the I.R.S.’s main database. The method for tracking down old filings is reminiscent of the Dewey Decimal System.At a recent I.R.S. town hall attended by a senior Biden administration official, staff pleaded for new filing boxes, better staplers and more computers.Mr. Gunn describes himself and his fellow clerks as foot soldiers of tax forms, opening upward of 500 envelopes per day to sort checks, letters and filings that must be funneled to the correct team of tax examiners. The job is often thankless and frustrating as a result of the lack of resources at the I.R.S.“A surprisingly large amount of time has been used looking for carts to put files on and staples for stapling files together,” Mr. Gunn said in an interview.The I.R.S.By: Alan Rappeport
Title: Decades of Neglect Leave I.R.S. in Tax Season ‘Chaos’
Sourced From: www.nytimes.com/2022/03/04/us/politics/irs-chaos-tax-season-2022.html
Published Date: Fri, 04 Mar 2022 15:16:57 +0000
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