WASHINGTON — It’s Groundhog Day at the IRS.
After digging out of a daunting backlog from 2021, the agency has an even bigger backup for this tax season than it did a year ago and its pace for processing paper returns is slowing down, according to a watchdog report released Wednesday.
The National Taxpayer Advocate, an independent watchdog within the IRS, also said taxpayers are experiencing longer wait times on the telephone, and delays in processing paper returns have been running six months to one year.
The report on taxpayer challenges, which must be submitted twice a year to Congress, comes one day after the Internal Revenue Service announced that it is on track to eliminate its 2021 backlog of tax returns this week.
The Objectives Report to Congress contains proposals for lawmakers to consider going forward.
“When I released my Annual Report to Congress six months ago, I wrote that ‘Paper is the IRS’s Kryptonite, and the agency is still buried in it,’ ” National Taxpayer Advocate Erin Collins wrote in the report. “Fast forward to this Objectives Report: It’s Groundhog Day.”
She added: “At the end of May, the IRS had a larger backlog of paper tax returns than it did a year ago, and its pace of processing paper tax returns was slowing.”
Collins said of the agency’s problems: “The math is daunting.”
According to the report, at the end of May the agency had a backlog of 21.3 million unprocessed paper tax returns, an increase of 1.3 million over the same time last year. The agency fell short on its goal to bring on 5,473 new employees to process returns, with just 2,056 employees hired.
Additionally, phone wait times increased to 29 minutes on average, compared with last year’s 20-minute average wait time.
Jodie Reynolds, a spokesperson for the IRS, said the report’s numbers “are neither the most accurate nor most recent figures.”