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IRS bracing for chaotic tax season

Published: Jan. 12, 2022 at 1:57 PM AKST
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(CNN) - A warning from the IRS: This tax season is going to be messy.

The Treasury Department says pandemic-related issues and budget constraints may lead to a delayed tax refund and tax professionals are bracing for any potential issues.

“I anticipate this tax season to be extremely busy,” Jeff Badu, a CPA at Badu Tax Services, said. “Not only for the tax preparers, you know, but also for the taxpayers as well.”

The IRS is blaming staff shortages for creating a nightmare scenario, saying it might have 1 million returns backlogged, but the number this year is “several times worse.”

“You know we’re working as hard as we can,” Charles Rettig, a commissioner at the IRS, said.

The IRS is also saying it needs more money.

It’s an issue the agency’s commissioner raised before Congress at a hearing last year, saying that while the tax code has grown more complicated, the funding has stayed the same.

Call centers can’t keep up.

The IRS says it was unable to answer two-thirds of the calls it received last year and processing centers for paper tax returns were closed for much of the pandemic.

All this adds to an already complicated tax filing year with COVID relief and increased child tax credits.

”They sent out half of it in 2021 which has to be reconciled on the 2021 tax return. So that’s going to create a lot of chaos,” Badu said.

So, what does it mean for you?

Tax experts recommend you file early and electronically.

The IRS begins taking returns on Jan. 24. That’s about two weeks earlier than last year.

Experts say filing paper forms is going to add time.

This year’s deadline is April 18 for most filers.

Meanwhile, the Biden administration wants $80 billion more over the next decade for the IRS to hire staff and upgrade technology.

That’s part of his Build Back Better bill, which is currently stalled in congress.

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