It’s been a busy year for the Internal Revenue Service. More than 136 million federal tax returns have been filed so far in 2021, with over $254 billion in refunds processed, despite the problems caused by the shutdowns and additional legislation generated by the pandemic.
The service shared a number of additional stats at a recent update meeting with stakeholders, according to Stephen Mankowski, the tax chair at the National Conference of CPA Practitioners, including:
- 94% of refund returns were filed electronically, with 92% direct deposit.
- The IRS answered 9.9 million calls, with the month of March at times experiencing 1,500 calls per second.
- A thousand IRS employees will be added by summer.
- Advance child tax credits will begin to be sent out by July 15, 2021.
- Nationwide Tax Forums will begin — virtually — on July 20, 2021.
- New applications for FIRE (Filing Information Returns Electronically) will be available in September.
Officials at the meeting also highlighted the status of various stimulus packages, particularly those focused on restaurants and public venues, and plans at the Small Business/Self-Employed Division, which includes significant hiring goals.
Stimulus updates
Small Business Administration funding for the Paycheck Protection Program has been exhausted; however, $6.2 billion remains available for underserved areas. Applications that are already in the pipeline will likely be approved and funded. The state tax treatment for PPP loans and forgiveness varies from state to state, and there continue to be changes.
The Restaurant Revitalization Fund is for more than just restaurants, Mankowski noted. “It includes caterers, bars, wineries, and other entities in the food industry. There have been over 300,000 applications. $2.7 billion has been distributed, with monies set aside for women, minorities, veterans and others.”
The Shuttered Venue Operators Grant program had 11,600 applications by the beginning of May. Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.
Economic Injury Disaster Loans are, in fact, loans and therefore are not forgivable, Mankowski noted. “They are not to be confused with the EIDL Grants (of $1,000 per employee), which are forgivable," he said. "Loans have been increased to $500,000 per entity. If you previously applied for a loan, you can also apply for increases.”
The SBA has been using Form 4506-T, which allows a lender (in this case, the SBA) to verify with the IRS that the forms supplied to prove the applicant’s income match those in the possession of the IRS. “Be sure to use the appropriate form,” advised Mankowski.
Major hiring goals at SB/SE
Darren Guillot and De Lon Harris have been designated as co-commissioners of the Small Business/Self Employed Division since Eric Hylton’s retirement at the end of March. Much thought was put into the configuration of the department, including compliance with various offices, such as Examinations and Enforcement, and incorporating many aspects under the Collection Division.
Regarding COVID, things are changing rapidly, with the safety of taxpayers and employees remaining paramount. Only a few in-person interactions are occurring with the consent of the taxpayer and representatives in accordance with CDC guidelines. More than 90% of SB/SE Exam employees are still teleworking. Currently, the SB/SE is looking to hire 3,100 new employees, including 1,300 revenue agents and 400 in campus for correspondence exams, according to Mankowski.
“There will be more hires in 2022,” he said. “Some of the staff will be specifically assigned to work against abusive promoters, tax scams, and abusive tax shelters.”
Collection will continue to be a stand-alone division. Automated levies have been halted since April 2020 due to COVID. Installment agreements have been modified to include new tax debt. The automated levy program will be returning soon, but the IRS wants to ensure that no additional stimulus payments could be affected by this program.
Collection is hiring 518 specialists, including bilingual employees. They are also working on “voice-bots” to help implement online payment agreements and set up installment agreements or transcripts. The program was created in December 2020 and turned over to IT in March 2021. Next year, it is expected that these bots will be able to address many of these calls and help increase the level of service to over 50%. In addition, the Automated Collection System will be increased with new staff hiring.
The IRS currently has 1,921 revenue officers in the field, with over 650 more officers to be hired this year. This allows growth as the current staff needs to be trained. Due to low staff, they are looking to bring on new employees to focus on high-income deficiencies and delinquent filers.
Meanwhile, delays on processing refunds continue, according to Mankowski.
“Congress kept tweaking some of the qualifications for the stimulus payments recovery rebate credit based on different years’ returns,” he said. “One agent told me that from the start of filing season he had more than 800 calls with an Error Code 900 issue. When a taxpayer files a return and qualifies for additional stimulus money based on a prior year’s return, it gets moved into that category. When you call, you’re told the return will need additional processing to recalculate the recovery rebate credit. They estimate it will take 10 weeks from the date of filing.”
