IRS (WTH)?
I have had lots of questions from my clients about why they have yet to receive refunds. Why the delay?
The answer is not easy. The complications began up to 10 years ago. The IRS has never been popular with lawmakers and budget cuts ensued.
In 2013, Congress cut the IRS’ budget by $600 million. The cuts manifested themselves in staffing decreases.
Operating cost and full-time equivalent positions realized, fiscal years 2011 – 2020:
| Fiscal Year | Operating Costs | Full-time Equivalent Positions Realized |
| 2011 | 14,204,824,136 | 94,709 |
| 2012 | 13,762,078,957 | 90,280 |
| 2013 | 13,042,254,968 | 86,974 |
| 2014 | 12,768,759,741 | 84,133 |
| 2015 | 12,453,381,764 | 79,800 |
| 2016 | 12,682,873,794 | 77,924 |
| 2017 | 12,174,935,982 | 77,924 |
| 2018 | 12,009,540,484 | 73,519 |
| 2019 | 11,836,131,332 | 73,554 |
| 2020 | 12,316,275,000 | 75,773 |
The population of the US increased from 308.7 in 2011 to 331.4 million in 2020. That is a 7.3% increase. IRS staffing has fallen 25% in the same time period.
The IRS had 9,510 auditors in 2018. That’s down 33% from 2010. The last time the IRS had less than 10,000 auditors was in 1953. The economy was 1/7 of the 2018 economy.
Almost 1/3 of the remaining employees will be eligible to retire in the next year, many of them will.
The United States Federal Government shutdown was from December 22, 2018, to January 25, 2019 (35 days). This took place while the IRS was gearing up for the 2018 filing season. This put the IRS on its heels for the remainder of 2019.
In 2020, IRS offices were closed for most of the year. The services delayed (as listed by the IRS.gov website) are as follows:
- Live phone support
- Processing tax returns file by paper
- Answering mail from taxpayers
- Reviewing tax returns, even for returns filed electronically.
At this time, the IRS was tasked with maintaining three economic stimulus payments, dealing with after year-end tax changes to 2020 returns, and creating a payment system for child credits as of July 2021. Creating the stimulus payments and the monthly child credit were new duties.
The IRS workforce duties are overflowing with fewer people working.
Between attrition of IRS employees, budget cuts, and increase of duties assigned to IRS. They have been overwhelmed. They will dig out though.
With an increased budget, IRS will increase enforcement with more inexperienced agents. Having someone experienced in your corner would be beneficial.
The natural reaction is to increase staffing. The current administration wants to increase funding to IRS by $80 billion. They seek to increase enforcement to high-income non-filers.
If you do run into tax trouble reach out to our tax resolution firm and we’ll schedule a free no-obligation consultation to explain your options in full to permanently resolve your tax problem.
Contact us at 859-743-6346
