One Week into Tax Season, the IRS is Already Failing Taxpayers

Press Release

This week marked the official start of tax season. Unfortunately, tax filers everywhere can expect a frustrating process and potential lengthy delays on their returns.

The Biden administration blames a lack of IRS funding for the backlog. In reality, the IRS's problems stem from two primary issues: the slowdown in service due to pandemic telework policies and a series of Democrat programs, like Obamacare subsidies and monthly Child Tax Credit payments, which have shifted agency resources away from its core missions of tax compliance and customer service. While President Biden and congressional Democrats have proposed an additional $80 billion for the IRS, this funding would be directed to enforcement -- particularly new audits of farms and small businesses, not return processing and customer service.

President Biden has also proposed using the IRS to monitor Americans' spending by requiring financial institutions to share certain banking transactions -- a massive overreach and abuse of government authority which would create more work for local banks and credit unions. This is especially outrageous considering the agency has a long track record of targeting taxpayers for their political views, not to mention their history of data being leaked to the press. I adamantly oppose this change and have cosponsored legislation to prohibit this violation of taxpayer privacy.

While there are certainly hardworking people at the agency, the bureaucrats running the IRS are ill-equipped to carry out the most basic functions of the agency and should not be given more control over Americans' finances. In fact, as of December, the IRS was still processing some 6.7 million individual returns from the previous year. This is an unacceptable backlog that must be addressed.

The IRS's failures have been well-documented for many years and -- in addition to supporting lower taxes for Nebraskans -- I have worked to reform the agency and bring some commonsense to the filing process. I supported the Taxpayer First Act, a bill spearheaded by the House Ways and Means Committee and signed by President Trump in July 2019. This law, which takes effect this tax season, gives more taxpayers access to electronic W-2s. The IRS encourages electronic filing to help prevent potential delays, and the Taxpayer First Act helps ensure tax filers have more convenient options to access the documentation they need.

While measures like the Taxpayer First Act are a step in the right direction, more must be done to reform and hold the agency accountable. For example, the IRS recently mailed millions of letters to families regarding their advanced Child Tax Credit; letters these families will need to file their taxes. Earlier this week, the agency shared that some of the letters are incorrect -- though they can't say for sure how many. Submitting incorrect information in your tax filing could lead to long processing delays, and it is unacceptable the IRS has already made such a massive error that could impact millions of families.

Certain people who earn money through ridesharing, meal delivery and marketplace platforms will also face new and burdensome requirements this tax season due to changes made in the stimulus bill Democrats passed last spring. Previously, certain businesses were required to provide 1099-K forms to sellers or contractors who earned $20,000, or if the business facilitated 200 or more transactions. The stimulus bill lowered that threshold to just $600, meaning more paperwork and potential audit nightmares for many of these independent contractors.

Unfortunately, President Biden has no plan to reform the IRS to make sure it is serving taxpayers. The IRS should be working overtime to ensure tax filers are receiving the kind of customer service they deserve, but instead they're more concerned with squeezing every penny out of hardworking Americans. This is why I am a strong proponent for reforms that will bring the IRS into the 21st century and protect American taxpayers.

As we head into what is sure to be a difficult tax season, Nebraskans who reside in the 3rd Congressional District can always contact me for assistance if they do not receive a timely answer from a federal agency. Visit adriansmith.house.gov or call 308-384-3900 for more information on how my office can help.

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