Expert: Americans can expect a ‘tax season from hell’

The COVID-19 pandemic has not only created major difficulties for brick-and-mortar businesses in the United States — it has also made it more difficult for government agencies to function, including the Internal Revenue Service. Washington Post opinion writer Catherine Rampell, in her January 13 column, lays out some reasons why Americans can expect this tax season to be especially bad.

“While tax season is never exactly a barrel of laughs, for many taxpayers, this year could shape up to be the filing season from hell,” Rampell warns. “Don’t take it from me. These are warnings from U.S. Treasury officials, who are trying to brace the public for refund delays, service disruptions, interminable telephone-hold purgatories and other unpleasantries that taxpayers will face over the next few months. This second consecutive difficult tax season might not only leave today’s taxpayers seething — it could also well scar the government’s continued ability to fund itself for decades to come.”

Rampell notes that although the IRS was having problems before the coronavirus pandemic, COVID-19 made them worse. COVID-19, which originated in Wuhan, China in late 2019, has killed more than 5.5 million people worldwide and over 846,000 people in the United States, according to Johns Hopkins University in Baltimore. And now, IRS workers have to contend with COVID-19’s highly infectious Omicron variant.

“The agency’s mail centers were shut down for months in 2020,” Rampell observes. “Illness knocked much of its customer service workforce out of commission. Employees working remotely scrambled to figure out how to handle paper-based caseloads.”

Rampell continues, “Amid all this, Congress had the IRS set up entirely new safety-net programs — working from scratch, often remotely, using 1960s IT and with little prep time. First, the agency issued several rounds of stimulus payments to most American households, then a monthly child allowance to the parents or guardians of nearly every child in the United States. Under the circumstances, the agency executed these new emergency responsibilities admirably. Heroically, even. But customer service — always abysmal — worsened.”

The Post columnist notes that customer service at the IRS was so bad in 2021 that “only about 11%” of the taxpayers who called the agency for assistance, according to a report to Congress, were able to get an employee on the phone; in 2020, 24% of callers were able to.

“Many were desperate to reach someone, anyone, because they had questions about how to abide by the law, given pandemic-era changes to the tax code,” Rampell notes. “Others were desperate to figure out what was holding up their refunds. In 2021, for instance, the IRS sent more than 14 million notices to taxpayers saying the agency had identified a ‘math error’ on their return. Most of these ‘errors’ were flagged as related to claims for legitimately confusing unpaid stimulus payments. That left refunds in limbo, sometimes for many months, until the matter could be resolved.”

Rampell adds, “Backlogs swelled, setting the agency up for a terrible start to the upcoming filing season. Normally, the IRS starts the season with about 1 million pieces of backlogged documents; this year, Treasury officials say, they have ‘several times’ that amount.