Politics

Your tax refund may actually land on time this year. Thank the IRS.

As Americans turn the page on another tax season, the Internal Revenue Service may finally be turning the corner after a mountainous backlog of tax returns, delayed refunds and poor customer service gave people even more reason to loathe the federal agency they love to hate.

Over the past year, the IRS has rebuilt its ranks, answered more than 80% of calls and worked its heap of unprocessed returns down from over 12 million to roughly 2 million, the U.S. Treasury Deported reported this week. Getting help is easier, too. Taxpayers now face an average wait time of four minutes to get an IRS employee on the phone, down from a patience-sapping 28 minutes last year.

“Tax filing season this year has gone much more smoothly than 2020 and 2021,” Howard Gleckman, a senior fellow in the Urban-Brookings Tax Policy Center, told CBS MoneyWatch. “They did get extra money and were able to hire more people to answer the phone. They dug through a pile of paper returns, which was an unimaginable mess. So even with a small amount of money, things are better.”

Tax pros concur — aside from smaller-refund frustration, the filing process this year has been without disasters.

“We’re returning to the way taxes really worked, mostly, before COVID,” said Eric Bronnenkant, head of tax at Betterment.

What went right?

The IRS was able to hire 5,000 customer service agents and install new online systems thanks to additional funding last year as part of the Inflation Reduction Act. Some pundits have touted these results, pointing to the IRS’ improvement as an example of government performing “when you let it work,” as Steven Rattner, a former member of the Obama administration and now CEO of investment firm Willett Advisors said this week on Twitter.

Last year’s budget increase was just a small fraction of the $80 billion injection of funding the IRS expects to receive over the next decade as part of the Inflation Reduction Act. In addition to refilling its depleted ranks, the agency also plans to update some telephone systems to allow callers to leave messages and get a call back —a feature that banks, utilities and airlines have used for a number of years.

“For years and years you couldn’t leave a message, but now you can,” Gleckman said. He also noted that, while there’s a lot of partisan argument today about the exact portion of phone calls that the IRS is answering — one camp puts it at 87%, while another puts it in the high seventies — “there’s not much debate that they’re better.”

Critically, the IRS has been processing paper returns more quickly by scanning them rather than, as was its practice for decades, having staff manually type in people’s information. It’s on track to scan “millions” of returns this year, the agency said, which means faster tax refunds.

Congress also helped this year by refraining from its habit in recent years of changing the tax law only weeks before, or even during, tax season.


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“Late legislation, a relatively new phenomenon 10 years ago, has taken on a life of its own. But this year we didn’t have any of that, said Mark Steber, chief tax information officer at Jackson Hewitt. “It’s been a very smooth tax season. No glitches, no IRS shutdowns, no computer problems for most people.”

The IRS’ improved performance is only an initial step in a multi-year modernization plan the agency released earlier this month. However, even with the most modern technology and better staffing, there’s a limit to how good the tax-filing experience can get, Gleckman noted.

“They’re not going to make the tax code any simpler. The IRS can’t do that — that’s Congress’ problem,” he said.

The National Taxpayer Advocate recently ranked the complexity of the tax code No. 2 on its list of the 10 most serious problems at the IRS, noting that the average individual spends 13 hours — one and a half working days — filing a single annual return, while the average small business spends upward of 80 hours and nearly $3,000 on the effort.

“One of the things I fear is people are still going to be mad,” Gleckman said. “They’ll say [of taxes], it’s too complicated! And it’s not the IRS’s problem — that’s Congress.”


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