IRS Makes Plea for Upgrade to Improve Tax Collections

October 8, 2020 by Tom Ramstack
IRS Makes Plea for Upgrade to Improve Tax Collections
Internal Revenue Service Commissioner Charles Rettig prepares to testify before a House Committee on Oversight and Reform hearing on Wednesday, Oct. 7, 2020, in Washington. (Tasos Katopodis/Pool via AP)

WASHINGTON — Lawmakers joined the Internal Revenue Service’s commissioner Wednesday in making a plea to upgrade the computers and staff that collect the nation’s taxes.

They said budget cutbacks and the coronavirus have resulted in shortcomings in the agency’s ability to enforce tax laws and return refunds to taxpayers.

“The IRS is critical to the overall well-being of our country,” IRS Commissioner Charles P. Rettig told the House Oversight and Reform subcommittee on government operations.

He added that the IRS faces challenges with its outdated computer systems and budget cutbacks that reduced its staff by 22%.

In addition, the coronavirus pandemic forced the agency to shut down call centers and Taxpayer Assistance Centers this spring and summer as many of its employees shifted to teleworking.

“We don’t have the ability and staffing to answer all the calls but we are doing our best,” Rettig said.

The IRS is phasing back its usual work schedule but Rettig told Congress the “reopening has been difficult.”

By late July, the IRS’s backlog of work included about 9.2 million returns awaiting processing and 7.9 million pieces of unopened mail. The mail consisted largely of tax returns and check payments.

Members of the subcommittee expressed concern the challenges of trying to eliminate the backlog might upset the IRS’s ability to prepare for the 2021 filing season.

“This does not sound like an agency fully ready to serve the public during a pandemic,” said subcommittee Chairman Jerry Connolly, D-Va.

He has co-sponsored a bill that would give the IRS much of the new technology the agency says it needs to process and audit tax returns. It still is pending in Congress.

Some of the computers use a form of the software language COBOL that dates from the 1960s.

However, he added computer upgrades alone would not make up for budget cutbacks that started 10 years ago, when revelations of lavish expenditures by top IRS officials prompted a backlash in Congress.

Since then, about 20,000 full-time IRS employees have been laid off.

Connolly said the hurt put on the IRS has come back to hurt the American public as the agency struggles to collect 96% of the federal government’s revenue, or $3.5 trillion per year.

“Unpaid annual taxes owed but not collected are estimated at $454 billion a year,” Connolly said.

In addition, about nine million Americans still are waiting for the $1,200 economic stimulus checks they were supposed to receive from the IRS last April.

His concerns were shared by Rep. Jody Hice of Georgia, the ranking Republican on the subcommittee.

“This is a bipartisan issue,” Hice said.

Much of the IRS budget for information technology is spent on maintaining outdated systems, he said.

“They are going to require modernization,” Hice said.

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  • budget cutbacks
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  • House Oversight and Reform Committee
  • income tax
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