This Tax Season Could be Especially Challenging, Warns the IRS

By Goldman Sachs Ayco Personal Financial Management

Although the Internal Revenue Service (IRS) still has a large backlog of 2020 returns to sort through, the Service began accepting and processing 2021 tax returns on January 24, 2022. However, IRS officials are already warning that this will be another challenging tax season, warning of likely processing delays and customer-service issues.


An understaffed, overwhelmed IRS

According to a recent Bloomberg article, the IRS has seen its customer service workforce shrink by more than 40% since 2010.1 All the while, last tax season’s call volume had almost quadrupled prior tax season high marks. In fact, the IRS has stated that at one point in March 2021, it received as many as 1,500 calls per second.

The Washington Post has reported the IRS had fewer than 15,000 people last tax season who were expected to handle more than 240 million calls.2 The Post also reported there are currently fewer auditors at the IRS than at any point since World War II.

Ultimately, it is reported that IRS representatives answered fewer than 1 in 10 phone calls during the 2021 tax-filing season and commentators don’t expect this tax season to go much better.

In fact, IRS Commissioner Chuck Rettig himself has already stated, “The pandemic continues to create challenges.” As a result of this environment, taxpayers should expect delays from the IRS this tax season.

Stay close to your advisor

Keep these considerations in mind and discuss best practices (like providing direct deposit information in lieu of paper checks when possible and e-filing in lieu of paper filing) with your advisor to help this tax season go smoothly.

1 https://www.bloomberg.com/news/articles/2022-01-04/irs-customer-service-is-so-bad-even-tax-preparation-professionals-are-fed-up

2 https://www.washingtonpost.com/us-policy/2022/01/10/treasury-irs-filing-season/


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ABOUT THE AUTHOR

Goldman Sachs Ayco Personal Financial Management

United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.

The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.

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