February 7, 2022

The IRS had a terrible 2021 and this year looks even worse. Millions of people experienced unusually long processing times last year. Lengthy waits, delayed refunds, and general confusion made interactions with the IRS more frustrating than ever.

Unfortunately, it could just be a precursor of what’s to come.

Americans checked the status of their refunds on the IRS website more than 630 million times last year. In many cases, it didn’t work. That left taxpayers in limbo as the IRS fell behind processing returns and didn’t do a good job communicating, leading to premature collection notices.

Of course, the pandemic didn’t help. But that’s not the real issue. The cause of these problems is the underfunding of the IRS.

From 2010-19, Congress reduced the IRS budget from $14.6 billion to $11.5 billion, a drop of more than -21%. Staff levels fell too, from 94,000 employees down to 73,000, which is about a -22% dip.

With less budget and manpower, the IRS started the 2021 tax season behind and never caught up. Worse, it seems we’ll see an encore in 2022.

Paper kills the IRS, I guess. Last year, paper returns took an average of eight months to process. As of Dec. 23, 2021, the IRS said it still had 6 million unprocessed returns from 2021.

This needs to get fixed. Delayed refunds can have nasty consequences, including financial difficulties and deferred medical care.

But quick action and government usually don’t mix.

So, I would temper any expectations of a fast refund coming your way. And if you happen to make a mistake on your return, you may need healthy doses of divine intervention and patience.

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