IRS Getting Back on Track

According to Law360, the Internal Revenue Service is in a position to resolve its backlog of unprocessed tax returns, which number in the tens of millions, by the end of this year, IRS Commissioner Chuck

Rettig told House lawmakers on March 17, 2022.

Barring any unanticipated developments, such as those related to the pandemic, the IRS should be able to enter the next calendar year having resolved its backlog, Rettig said during a hearing before the Ways and Means oversight subcommittee.

"If The World Stays As It Is Today, We Will Be What We Call 'Healthy' By The End Of Calendar Year [2022] And Enter The [2023] Filing Season With Normal Inventories," Rettig Said.

In testimony provided to the Senate Finance Committee last month, National Taxpayer Advocate Erin Collins said that as of early February, the IRS had approximately 23.5 million returns, correspondence and account management cases in its inventory that needed to be processed manually. The IRS announced in January that it would be deploying so-called surge teams that would help return the agency's processing and correspondence inventories to a "healthy level."

As part of the surge teams, the IRS has brought 800 experienced employees onto its account management team and, as of Thursday, has added 700 workers to its submissions processing operations, Rettig said during the hearing.

The IRS was also granted direct-hire authority from the Office of Personnel Management to fill some 10,000 entry-level positions in submission processing and account management, Tony Reardon, head of the National Treasury Employees Union, previously told Law360. That authority went into effect only two days ago, Rettig said.

Employees can be on-boarded within 30 to 45 days under the direct-hire authority, Rettig said, compared with the normal six- to eight-month process.

The Agency Also Received Substantial Interest From Job Applicants In Response To Its January Announcement That The Office Of The Chief Counsel Was Looking To Hire As Many
As 200 More Attorneys To Take On Abusive Tax Schemes,
Rettig Said.

"I'm pleased to say that we put out that announcement and we received multiples of that from folks who are coming on board," he said.

Still, the IRS is consistently "out-gunned" when it comes to complex matters involving partnerships, despite having 6,500 experienced field agents active, Rettig said.

"We do not have the resources to go after the 'bigs' or the 'super bigs' as we refer to them," he said.

Rettig has previously told lawmakers that the agency is outmanned on those types of issues.

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