IRS Facing Backlog of Taxpayer Correspondence
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What is the main topic discussed in this episode?
Here's your money briefing for Monday, June 8th. I'm J.R. Whalen for The Wall Street Journal. The July 15th tax deadline is a little more than a month away, and the IRS is racing to reopen dozens of offices that were closed due to the pandemic. But when they do, they'll have to deal with a backlog of millions of pieces of correspondence from taxpayers.
Some of that's returns, some of that's other correspondence.
How large is the IRS backlog of taxpayer correspondence and what does it include?
And then there's just the existing backlog of people want to call and come in and talk to people from the IRS to get problems resolved.
Could this lead to the July 15th tax filing deadline being extended? We'll check in with our tax reporter Richard Rubin in a moment.
The IRS just finished sending out $267 billion in stimulus payments in just two months. Now it faces another monumental task, reopening offices that were closed during the pandemic and tackling a backlog of mail from taxpayers, all with the July 15th tax filing deadline looming. Our tax reporter Richard Rubin is with us to explain. So Richard, what kind of a backlog are we talking about?
I think they're going to just start figuring that out. Reports are that they've got about 10 million pieces of mail that have come in that they've got to go through, open and process. Some of that's returns, some of that's other correspondence. And then there's just the existing backlog of people want to call and come in and talk to people from the IRS to get problems resolved. And so that's going to require... in-person visits. Sometimes it's going to require calling someone on the phone. And because they've been unable to do that, it's not even clear how much pent up demand is out there for IRS assistance. So are most of the IRS's offices open? No, it's a very gradual reopening. So this past week, they opened offices in Utah and Texas and Kentucky, and they've got eight more states in Puerto Rico where offices are slated to open over the course of the rest of June.
And that's for in-person work. Most of the agency has been running on telework, working from home, just like a lot of us are doing. But there's some functions, call centers and mail processing, things that require physical activity and aren't security. where they just haven't been able to operate.
Which IRS offices have reopened and which functions remain closed?
And so they're moving back in somewhat slowly for what they call those non-portable jobs. And it really is going to vary. There are big IRS service centers across the country. One's in Ogden, Utah, and Austin, Texas have been able to reopen this past week. And then some of the other larger ones include Atlanta and Fresno, California. And so we'll see those opening over the course of June.
Now, you mentioned face-to-face services offered by the IRS. That doesn't seem to dovetail very well with the pandemic.
Yeah, and that's not coming back anytime soon. So the walk-in centers or appointment centers or face-to-face audits and collections work that the IRS does, that's, I think, still a ways out until they can figure out a way to do that safely, both for taxpayers and for IRS employees.
Has there been any talk of the tax filing deadline being extended further?
There has been. You've seen some professional groups and business groups as well as the union that represents IRS employees calling for that to get delayed. It hasn't happened yet. We haven't seen a ton of pressure from members of Congress for that at this point. And a lot of things have come in.
How will closed walk-in services and in-person audits affect taxpayers during the pandemic?
People have been filing tax returns. since April. And so the backlog of potential returns to be filed is not quite as enormous as it would have been in April. But there are other things that are due. Other deadlines that came up between April and July for estimated taxes and other things have also been delayed to July 15th. So there is a number of items that are theoretically due on that date, which should create a fair amount of work for the IRS at that point.
Now, what's been the pace at which people are sending in their tax returns?
So it's been slower. The pace of returns coming in is about 6.5% below where it was this time last year.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:05–0:29
2
How large is the IRS backlog of taxpayer correspondence and what does it include?
0:29–2:27
3
Which IRS offices have reopened and which functions remain closed?
2:27–3:34
4
How will closed walk-in services and in-person audits affect taxpayers during the pandemic?
3:34–4:52
5
Is there discussion of extending the July 15 tax filing deadline and why?
4:52–5:29
Speakers
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