Tax filing season just started, and taxpayers are—once again—in for a rough ride. For starters, the Internal Revenue Service (IRS) has a backlog of over 6 million unprocessed returns from last year. As in 2021, many tax filers can expect to face delays in receiving their refunds. These delays disproportionately impact low-income taxpayers, many of whom are households of color, since their tax refunds can make up a significant portion of their annual income. The IRS needs additional funding to be able to meet taxpayers' needs, but with the Build Back Better Act having stalled in Congress, this year's tax season will be bumpy. 

For a glimpse at what lies ahead in the 2022 filing season, we can look at the problems taxpayers faced in 2021. According to the National Taxpayer Advocate's 2021 Report to Congress, more than three in four taxpayers (77%) received refunds last year, but tens of millions of them experienced delays. The IRS was behind because it carried over tax returns from 2020 and then received 17 million paper returns in 2021, which take longer to process than e-filed returns. Aside from delayed refunds, many tax filers could not access customer service at all. Just 11% of calls to the IRS from taxpayers seeking assistance were answered, while paper correspondence went unprocessed for months. 

Why all these problems? One factor is the COVID-19 pandemic. Over the past two years, the IRS has been tasked with administering three rounds of stimulus payments and the monthly Child Tax Credit (CTC) payments to families. The agency has had to reallocate funds and staff to run these programs, leaving fewer resources available for tax processing and customer service. 

For a glimpse at what lies ahead in the 2022 filing season, we can look at the problems taxpayers faced in 2021.

But the pandemic is not solely to blame. The IRS was under-resourced prior to 2020, with its budget having been reduced by about 20% and its workforce shrinking by 17% since 2010. At the same time, its workload—measured by the number of individual income tax returns received—has increased by 19%. Funding is also needed to improve the IRS' antiquated technology systems, which are the oldest in the federal government. Finally, the lack of resources also means that the agency has fewer auditors than at any time since World War II. This has led to a disproportionate number of Earned Income Tax Credit (EITC) recipients being audited—since EITC audits are easier and less expensive to conduct—with the highest burden falling on Black, Latinx and Native American communities. 

The IRS clearly needs more funding. The Build Back Better Act includes a provision for giving the IRS $80 billion over the next 10 years to increase its workforce, improve customer service, upgrade its technology and strengthen its enforcement power. Unfortunately, the legislation has not passed in Congress, and the frustrations many families experienced last year are likely to repeat themselves this tax season. 

Join us in asking Congress to pass the Build Back Better Act so that the IRS can deliver tax refunds on time and meet taxpayers' needs—especially now that the expanded CTC is not being distributed monthly. Low-income families need support and cannot afford to wait months for their refunds.