House Rescinds Funding For New IRS Agents, Which Could Delay Tax Refunds if Senate Agrees
The U.S. House of Representatives — under the leadership of the new speaker, Rep. Kevin McCarthy — recently voted for a bill repealing planned funding to hire 87,000 new IRS agents, CNN reported.
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“This was our very first act of the new Congress, because government should work for you, not against you,” McCarthy tweeted.
The bill passed along party lines, with a vote of 221 to 210. However, it is highly unlikely it will pass through the Democrat-controlled Senate.
If it does, it could result in delays in processing tax refunds in 2023, along with slower customer service from IRS phone representatives. In October 2022, the IRS hired 4,000 new customer service representatives as part of the Inflation Reduction Act.
The House bill, if passed, would repeal funding to hire more than 80,000 additional agents.
According to a report from the nonpartisan Congressional Research Service (CRS), the Inflation Reduction Act called for $45.6 billion to go toward “tax enforcement activities,” $153 million to the United States Tax Court, $25.3 billion for “operations support,” and $3.2 billion for taxpayer services such as “filing and account services, prefiling assistance and education.”
Delayed refunds, along with a lack of prompt customer service by phone, has been a tremendous problem in the past for the IRS. At the end of the 2021 filing season, the IRS still had 35.3 million tax returns awaiting manual processing, according to the National Taxpayer Advocate Annual Report to Congress that year.
In spite of the added staff in 2022, the problem persists. In December 2022, the Center on Budget and Policy Priorities reported that the IRS had a backlog of 31 million mail correspondences in 2020, likely resulting in delayed tax refunds.
However, the bulk of the funding from the Inflation Reduction Act, according to the CRS report, would go toward tax enforcement activities. This will not expedite the processing of tax refunds but, instead, increase audits. The audit rate, overall, has fallen by 58% since 2010, according to the CRS report.
As of 2022, the IRS had 10,500,000 individual paper returns awaiting processing. To get your tax refund faster in 2023, it’s best to file your taxes electronically, ensure all your information is correct, and sign up for direct deposit of your refund.
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