IRS transparency needed to keep public’s trust
Last weekend’s Mirror editorial focused on one plausible reason why many American taxpayers still are awaiting processing of their amended tax returns that they filed on Internal Revenue Service Form 1040-X — some more than two years ago.
That plausible reason: Despite the end of the pandemic, perhaps more than 50 percent of IRS tax-return processors still are working from home, outside of the controls and productivity of a formal work environment.
It is estimated that more than a million amended returns still haven’t been processed.
The IRS has not formally announced whether the current unprocessed-returns total is less or greater than the 1.43 million that existed on May 13, 2023, but the federal tax-collection agency says the amended accounts are being processed in the order in which they were received.
Congress should demand last year’s figure be updated publicly by May 1 and that quarterly reports be issued, going forward.
Both Congress and America’s taxpayers need to know how the backlog is being addressed and whether real progress on the amended-returns front is being made or not.
That transparency is important because, as the Mirror observed last weekend, “the IRS’ work-from-home decision-makers don’t seem to feel much, if any, urgency.”
There also is another important consideration: Many taxpayers awaiting money from their 1040-X filings have dealt with financial hardships because of not having their refund.
That is unfairness at the hands of a tax agency that maintains tax-filing deadlines to which taxpayers must adhere or face uncomfortable circumstances.
Last weekend’s editorial appeared under the headline “IRS needs stronger rules to govern itself.” The purpose of this weekend’s editorial is to urge the IRS to consider outside help to erase the amended-returns backlog.
The Mirror is proposing the IRS enter into contracts with some of the most competent, knowledgeable, trusted tax-return-preparation companies across the nation to help end the amended-returns backlog.
Think of what that would mean. The current IRS staff could expend its energies on the latest regular annual returns while others would wade through the issues — some complex and time-consuming — that are at the center of the amended filings.
Under that scenario, teams of the most skilled IRS tax return reviewers could be assigned to quick verification of the correctness of the work performed by the outside contractors.
Some people might object to the perceived high costs involved in setting up such a temporary tax-return-resolution system.
However, it might save the IRS and the federal treasury money in the long run, because it would remove some of the pressures, recruitment and hiring costs, training time and fringe benefits associated with bringing on additional permanent workers.
Rather than hiding from reality, the IRS should admit that it is drowning in the amended-returns “swamp” and much of the blame rests on its shoulders.
Meanwhile, the IRS needs to act on the reality that in the workplace setting, there are no detours regarding laundry, caring for pets or performing daycare-like duties for children, or making a not-so-quick trip to the supermarket to stock up needed items — and perhaps fill up a vehicle’s gasoline tank.
The amended-returns problem is of a scope that demands extraordinary action. Congress and the White House will be remiss if they prevent that from happening.
