National Taxpayer Advocate (NTA) Releases 2021 Annual Report

Would you believe me if I told you that some people still haven’t received their tax refunds from the previous year? Unfortunately, it is true according to the most recent annual report from the National Taxpayer Advocate (NTA), a watchdog of the Internal Revenue Service. While some of these problems may only affect a small portion of taxpayers, some of us (especially tax professionals) feel their pain.

One of the largest complaints was for the delay in receiving refunds for individual filers. While most of the delayed returns are legitimate, they are flagged by IRS filters that are used to detect potential fraud. In 2020, the IRS fraud filters flagged about 1.9 million returns for identity verification, according to the NTA report. Another 3.3 million were pulled so that the agency could verify income and withholding.

In an effort to address the issue, the NTA made the recommendation for the IRS to develop modern technology to ensure that the fraud screens block less legitimate filings. The technology should also inform taxpayers in a more-timely manner of the status of their filing, specifically, the NTA recommended digital verification for identities to expedite the refund process.

The lack of digital communications and online access was another popular complaint about taxpayers, and rightfully so. The IRS, generally, does not have any way for taxpayers to view previous tax returns, IRS notices, or proposed assessments. However, the NTA believes that the infrastructure is there for the future. During the COVID pandemic, the IRS temporarily allowed its workers to transmit certain documents by email. With proper training and verification methods, this standard could make access easier for taxpayers. The professionals at The Center are more than knowledgeable in dealing with the IRS to come to a resolution, for more information, please contact us at (618) 997-3436.