Continued Backlog

We shouldn’t be surprised when the IRS lets us down a little bit. It happens often enough that it often feels it deserves nothing more than a shrug.

Of course, sometimes there are good reasons for the agency’s issues.  Like during the pandemic when fewer people were working in IRS offices, we understood why it was taking a long time for paper tax returns to be processed. Maybe where we went wrong then was feeling some excitement when the backlog was finally extinguished.

Well, that was part of the backlog apparently.

For earlier this month, a report was released by the Treasury Inspector General for Tax Administration that called out the IRS for having more than two million source documents involved in making a tax adjustment that still needed to be properly handled.

Essentially, tax adjustments happen either when the IRS finds an error in a tax return or when a taxpayer submits an amended return.  What has to happen from there, well, it doesn’t seem as streamlined or optimal a process as it should be, as outlined in an article about the situation:

“When a tax adjustment is made on a business or individual taxpayer's tax account, the IRS office that makes the adjustment needs to send all of the documentation supporting the adjustment to one of its tax processing centers, either in Austin, Texas; Kansas City, Missouri; or Ogden, Utah. Then when the adjustment is made, a Form 5147, Integrated Data Retrieval System Transactions Record, is printed at the tax processing center and paired with the source documents supporting the tax adjustment transaction. “

TIGTA also called the IRS out for not having a strategy to handle the 2.6 million documents stuck in this stage. This is along with reporting inaccuracies in the reporting of those document inventories.

So just all told, yeah, things are messy.

And with so much political debate over how much funding the IRS should receive, it is difficult to imagine that the agency’s multiple issues are going to magically fix themselves in the near future. This is simply something we must deal with, though. So let this be another example of how dealing with the agency can be timely and difficult, but it just is what it is.

But you can remain confident we are committed to working with you through it all if you ever need to have more interaction with the agency than you want.

Warmly,

Josh Bousquet
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