IRS expects challenging tax season due to the pandemic

WASHINGTON, D.C. (CNN) – A warning from the IRS: this tax season is going to be messy.

The Treasury Department said pandemic-related issues and budget constraints may lead to a delayed tax refund and tax professionals are bracing for any potential issues.

CPA Jeff Badu with Badu Tax Services, LLC said, “I anticipate this tax season to be extremely busy. Not only for the tax preparers, you know? But also for the taxpayers as well.”

The IRS is blaming staff shortages for creating a nightmare scenario, saying it might have one million returns backlogged, but the number this year is “several times worse.”

IRS Commissioner Charles Rettig said, “You know we’re working as hard as we can.”

The IRS is also saying it needs more money. It’s an issue the agency’s commissioner raised before Congress at a hearing last year, saying that while the tax code has grown more complicated, the funding has stayed the same and call centers can’t keep up.

The IRS said it was unable to answer two-thirds of the calls it received last year and processing centers for paper tax returns were closed for much of the pandemic.

All this adds to an already complicated tax filing year with COVID relief and increased child tax credits.

Badu said, “They sent out half of it in 2021 which has to be reconciled on the 2021 tax return. So that’s going to create a lot of chaos.”

So, what does it mean for you? Tax experts recommend you file early. The IRS begins taking returns on January 24th. And file electronically! Experts say filing paper forms is going to add time.

Again, you can submit your taxes starting January 24th. That’s about two weeks earlier than last year. This year’s deadline is April 18th for most filers.

Meanwhile, the Biden administration wants $80 billion more over the next decade for the IRS to hire staff and upgrade technology.

That’s part of his build back better bill, which is currently stalled in Congress.

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