This last item from the most recent issue of The Kiplinger Tax Letter is a bit depressing for all of us hoping that IRS will get back to normal in regard to processing returns and correspondence anytime soon.

“IRS will have trouble wiping out its backlog of 2020 returns and other filings,
despite its hopes of catching up amid the temporary personnel moves it made recently.
The agency shifted 1,200 personnel from other areas to assist with the backlog.
But there are over 20 million filings by individuals and corporations from last year
to sort through. IRS is begging Congress for more funding, but even if the agency
does get the money, any relief for taxpayers won’t be immediate. It will take months
or longer to hire new workers in this tight labor market and to onboard them.”

This will be the messiest Tax Season ever, to-date; something I have actually said each of the past two years.

Update 3/7/22
I’m much less optimistic about any timely resolution to the IRS backlog after reading the following in this morning’s newsletter from NCPE Fellowship.

“IRS to Hire 10,000 Workers to Help With Tax Return Backlog

The backlog includes at least 10 million individual tax returns and 4 million business tax returns going back to last year

The IRS is taking steps to relieve the backlog of tax returns.

The agency plans to hire 10,000 new full-time workers to play a direct role in that mission, according to Politico.

There are millions of unprocessed tax returns and other mail from individual and business taxpayers, according to the union that represents most of the IRS workforce.

The hiring process is scheduled to run through Dec. 31, 2023 and was first reported by the Washington Post.

In an effort to hire 5,000 new employees has fallen flat with less than 200 workers brought on board.

The new plan “sounds like an extension of that plan and its logic,” said Chad Hooper, president of the Professional Managers Association, a group that represents non-union personnel.

While he didn’t have the details of the plan, Hooper seemed skeptical about how easily it could be fulfilled.

“It’s unclear where the IRS believes these future employees are,” Hooper said.

There is a massive accumulation of paperwork going back to last year still awaiting processing, according to the report.

The mountain of paperwork includes at least 10 million individual tax returns and 4 million business tax returns, holding up refunds and credits going back to last year.

Starting this month, the IRS shifted 1,200 workers from their current jobs to deal with the backlog.

The IRS workforce currently sits at about 80,000, according to its website.”

Since almost all of our clients file their returns on extended due dates – normally October 15 – many of them are currently among the 23.7 million return backlog that IRS has admitted to.

Here is what I have had to send to a number of clients who are wondering why they haven’t received their refunds after more than four months.

“IRS is currently dealing with a backlog of almost 24 million 2020 and earlier year tax returns that need to be processed.  There has been a lot of press about this, such as this article.

Is the Massive IRS Backlog Impacting This Tax Season?

The latest news is that they have not processed any returns received after April 2021 and they are asking people not to send in extra copies because that will just make matters worse for them.

It’s a mess on several levels.  Many of us tax pros are hoping IRS delays this year’s Tax Day from April 18 until at least a few months later in order to give themselves time to get caught up with the prior year returns before they receive millions more 2021 returns.

I hope this helps you understand what’s going on.”

When the Dims proposed allowing IRS to spy on everyone’s bank account that has at least $600 in it, I had a sneaking suspicion that using such an insanely low threshold so as to encompass everybody was a negotiating tactic. It would eventually lead to people feeling a sense of relief when the break-point for IRS spying was raised to a higher level.

As this news story shows, the second phase of this “negotiation” with the public has been announced by the Dims, raising  the “spying is acceptable” threshold to $10,000. This actually isn’t as big a compromise as it may seem at first blush. It doesn’t mean balances of $10,000 or more, which would exempt a lot of accounts.  It is $10,000 or more total deposits and withdrawals during a year.  That works out to a little more than $192 per week.  That would put a lot more accounts into the IRS crosshairs.

Their ultimate goal is to make everyone comfortable with the concept of IRS examining every aspect of all of our finances. Once the spying mechanism is accepted as a valid government procedure, even if it begins at $10,000, it will then be an easy step for that number to be lowered.  The camel’s nose under the tent cliché fits here.

This process reminds me of the old joke about negotiating a price for sex.

Current Treasury Secretary Janet Yellen and other wacko Dims can’t stop screaming about the fact that every single person in this country is a dastardly tax cheat and the only way to close the wildly exaggerated Tax Gap is to give IRS even more powers to ignore the Constitution and do whatever it takes to squeeze more money out of everybody.  Dims have never been shy about their guiding philosophy of the ends justifying the means approach to accomplishing their goals, even if those are flagrantly unconstitutional.