IRS struggling during extended tax season with coronavirus

The novel coronavirus pandemic has forced the Internal Revenue Service to dramatically scale back operations late in tax-filing season, according to a new report.

The report, released Monday by the Treasury Inspector General for Tax Administration, noted that unlike any other tax-filing season, the IRS needed to take unprecedented and drastic actions to address COVID-19 to protect the health and safety of its employees and taxpayers. That includes closing tax processing centers, taxpayer assistance centers and other IRS offices across the country.

Starting Monday, March 30, the IRS directed all employees who aren’t currently teleworking but whose work is portable or can be adapted to work off-site to work from home (or an alternate location) including employees who are not currently on a telework agreement.

In addition, the IRS introduced its new “People First Initiative” to help taxpayers facing the challenges of coronavirus. The initiative includes a series of steps to help taxpayers by offering relief on different issues ranging from easing payment guidelines to postponing compliance actions. Information on the various actions the IRS is taking and the relief being provided can be found on the IRS website at www.IRS.gov/coronavirus.

The actions taken by the IRS in response to the COVID-19 pandemic will affect its ability to provide timely customer service and tax return processing, TIGTA’s interim filing season report noted. As of Feb. 28, 2020, the IRS received approximately 59.3 million tax returns (with 95.7 percent electronically filed) and issued more than 45.5 million refunds totaling nearly $139.6 billion. During calendar year 2020, the IRS expects to receive approximately 155.1 million individual income tax returns (15.3 million filed via paper and 139.8 million electronically filed). Participation in the IRS Free File program has increased significantly this filing season. As of Feb. 28, 2020, more than 1.5 million Free File returns were received compared to the more than 1.3 million Free File returns received last year as of March 1, 2019.

Tax season has now been extended until July 15, 2020 in response to the coronavirus. TIGTA plans to monitor and evaluate the IRS’s response and implementation of the actions taken and issue another interim report to provide real-time information on the 2020 filing season, including the challenges the IRS faces to implement the delay in tax return filing and payments to July 15, 2020, along with the likely backlogs.

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