Commissioner Rettig, Come Clean and Stop the B.S.

Last week I wrote a post titled 18 Months and CountingAs promised, here’s the follow-up and it can be summed up with a simple line, “The IRS is lying to everyone about correspondence.”

Commissioner Rettig today said he is “hopeful to get through the backlog by summer,” and that there’s a 24 million return backlog of business and individuals per TIGTA.  And he said that the IRS always has a backlog.  But I and other tax professionals are seeing paper-filed returns take one year to be processed (and I’ve seen reports of longer).  That’s not normal.

I am not stating that Commissioner Rettig is lying in his testimony.  Indeed, I strongly suspect everything he said is the truth…but not the whole truth.  He sidestepped the question about the backlog stating there’s always inventory of returns.  No Congressmen followed up on that issue, but had they asked the question, “Is it normal to have a one year backlog for returns?” then we might have gotten more answers.  Additionally, no one asked about the delay in correspondence.

I didn’t see anything in the testimony (and I will admit I did not watch all of it) regarding the backlog in correspondence.  It’s ridiculous and is causing anyone who is corresponding with the IRS plenty of pain.

Today, the National Taxpayer Advocate asked for a multi-year budget for the IRS and guaranteed funding.  The IRS is the only (or one of the only) government agencies where more money spent generally leads to more revenue for the government.  Her point is well-taken: It is impossible to plan long-term when the budget falls off a cliff annually.  That’s on Congress to fix and is not up to Commissioner Rettig.

For Commissioner Rettig, though, here are three simple questions that I’d like answers to:

  1. What is the delay in correspondence?  You said in January you’re actually opening mail timely.  How timely is the IRS in reading mail?  And what’s a realistic time-frame to get this delay down to three months?
  2. You stated that an “inventory” of returns is normal.  Is it normal for paper-filed returns to take a year to be processed?  Given that we’re in the midst of another Tax Season, and given many returns cannot be e-filed (either due to complexities within the returns or limitations within the IRS), what’s a realistic time-frame for the IRS to catch up?  (Hint: Summer is not realistic.)
  3. The IRS has issued a series of erroneous notices.  The most recent involved CP59 notices.  Is the IRS doing any forward planning regarding automated notices, turning these off so that this issue doesn’t recur?

(My guess on the answers:  It will take 1-2 years for the correspondence backlog to get reduced to the point the IRS routinely responds within three months…and that’s 1-2 years once the IRS fully reopens the IRS campuses.  Likewise, I suspect it will take at least another year before the IRS backlog in tax returns is down to something manageable.  And I highly doubt the IRS has done any forward planning on notices.)

You likely can think of other good questions for Commissioner Rettig.  I’d love to see our Congressmen and Senators ask these questions, and get some realistic answers.  It would be enlightening to all.

UPDATE: My thanks to the commentator who pointed out that I had originally typed, “…many returns cannot be paper-filed….”  You can tell it’s been a long Tax Season (already).

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