As the IRS works through millions of backlogged files, they are also stepping up its game to get through more tax returns faster, now that the 2022 tax season has ended.
Hiring Spree
The first thing the IRS is doing includes a large-scale hiring effort. In April, MarketWatch reported that the IRS is looking to hire 5,000 people in the near future. Many of the positions are entry-level, which means applicants don’t need prior experience working in the government or tax and financial sectors. So far, they have made more than 2,500 conditional job offers.
And those 5,000 new hires this year are expected to be met with an additional 5,000 in 2023. To expedite this process, lawmakers have given the agency the power to complete the hiring process in as little as 30-45 days, to help get people-oriented and into their roles quickly.
As of late March, the IRS still had 7.2 million unprocessed tax returns, including 2.7 million unprocessed tax returns received in the tax year 2021.
By March 31, the number of unprocessed returns was down to about 5 million total. The speed with which the IRS is working through the backlog can be attributed, in part, to a new error resolution function that greatly cuts down on the number of pending cases and helps tie up other loose ends.
Voice & Chatbots
We also recently talked about the IRS’ efforts to implement voice and chatbots to aid in the record-breaking number of calls they were receiving during the 2022 tax season.
With more than 3 million calls per day during the height of tax season, automated solutions are the only way the IRS can even begin to manage that customer call volume. And even with the new hiring goals, they have rolled out, there are still lots of people who call and have simple questions that can be cleared by artificial intelligence.
Since the pandemic, many institutions, even the oldest and least technologically inclined organizations within the federal government, have seen how much the proper implementation of automation and AI can help increase efficiency and customer satisfaction.
Expedited E-Filing
For those who are e-filing, there is good news. While, in general, taxpayers are advised that it could take up to 21 days to receive their tax refund, e-filers are getting theirs in as little as three to four days currently.
Paper returns, on the contrary, are handled in a first-in, first-out manner and will likely have to wait much longer to receive their refunds. Even more reason for you to e-file your information returns next year!
Room for Improvement
There are still many issues that stem from the IRS falling so far behind other private financial companies in spending funds on the procurement and implementation of new technology.
With the meteoric rise of cryptocurrency, the agency’s systems aren’t able to include information about virtual currencies and certain foreign income sources. This is compounded by the fact that the reports with these insights are also several years behind, with the most recent tax gap estimates that were finished only covering 2014 to 2016, with projections for 2019 coming soon.
The Importance of IRS Optimization
The average individual tax return is just over $3,000. And many people and their small businesses depend on these funds to set them up for the year ahead, pay down debts, and even secure financing for a new car or house in the coming months.
Having millions of unprocessed tax returns doesn’t just look bad, it also affects everyday life. Many Americans are dependent on receiving those information returns in order to petition their banks for business, personal, and home loans.
When your return hasn’t been processed and sent back, this stalls the momentum of these people and businesses.
It also creates more room for error later, with people sending duplicate returns, or losing parts of their filings.
With the new initiatives the IRS has laid out so far, Commissioner Charles Rettig is optimistic that the tide will start turning in a positive way soon, even as soon as this summer.
Take Your Tax Game to the Next Level
Are you one of the unlucky individuals or businesses that got stuck in limbo as the IRS worked through millions of unprocessed tax returns from 2021, including yours? The agency has shared guidance that filing early and e-filing your information returns is the surest and fastest way to keep your future files out of the unprocessed pile.
eFile360 makes it easy for you by allowing you to store all your electronic tax forms, make updates and additions, and e-file your taxes with ease. We can help you with any questions and have you feeling ready for tax season 2023.
Sign up for a free eFile360 account to make your tax season easier than ever before.