National Taxpayer Advocate Erin Collins released an annual report Wednesday that found the IRS made progress on catching up with the backlog of the millions of unprocessed tax returns and correspondence last year, showing some cautious signs of hope for this tax season (see story). The IRS received an extra infusion of funding last year from Congress after complaints about backlogs and difficulty reaching anyone on the IRS phone lines, including the dedicated Practitioner Priority Service for tax professionals.
"This filing season is the first to benefit the IRS and our nation's tax system from multi-year funding in the Inflation Reduction Act," said acting IRS Commissioner Doug O'Donnell in a statement. "With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year. We've trained thousands of new employees to answer phones and help people. While much work remains after several difficult years, we expect people to experience improvements this tax season. That's just the start as we work to add new long-term transformation efforts that will make things even smoother in future years."
The Jan. 23 start date for individual tax return filers gives the IRS some time to perform its annual updates and readiness work to make sure its systems run efficiently. Many software providers and tax professionals are already accepting tax returns; they will transmit those returns to the IRS when the agency begins accepting tax returns on Jan. 23.
The IRS urges people to have all the information they need before they file a tax return. Filing a complete and accurate tax return can avoid extensive processing and refund delays as well as avoid the possibility of needing to file an amended tax return.
In addition, the IRS is encouraging taxpayers to carefully review their tax situation to make sure they don't overlook important tax credits they may be eligible for, like the Earned Income Tax Credit. The IRS has set a special day on Jan. 27 to encourage people to make sure they understand the important benefits of the EITC, a credit that can help low- and moderate-income workers and families.