IRS Makes Strides in Taxpayer Services—But Processing Delays Persist. This Is What You Need to Know:

The National Taxpayer Advocate's 2024 Annual Report to Congress highlights significant improvements in IRS taxpayer services, while also identifying ongoing challenges that need to be addressed. Erin M. Collins, the National Taxpayer Advocate, notes, "For the first time since I became the National Taxpayer Advocate in 2020, I can begin this report with good news: The taxpayer experience has noticeably improved."

Key Improvements:

• Enhanced Taxpayer Services: In 2024, taxpayers experienced better service, received timely refunds, and faced shorter wait times to reach customer service representatives. These improvements are attributed to multiyear funding that has enabled the IRS to make significant strides in taxpayer services and information technology systems.

Persistent Challenges:

1. Employee Retention Credit (ERC) Processing Delays: As of October 26, 2024, the IRS faced a backlog of about 1.2 million ERC claims, with many pending for more than a year. While the IRS has valid concerns about paying ineligible claims, the slow processing time is harming many eligible businesses that rely on these funds to pay expenses.

2. Identity Theft Resolution Delays: The IRS continues to experience prolonged delays in resolving identity theft cases. The time to resolve these cases has increased from 19 months in 2023 to 22 months in 2024 ... causing significant hardship for affected taxpayers.

Recommendations:

The report emphasizes the importance of sustained funding to maintain and further improve taxpayer services. It urges Congress to ensure that any potential budget cuts do not adversely affect taxpayer services and technology modernization efforts. Additionally, the report calls for:

• Expanding the U.S. Tax Court

• Providing the Low Income Taxpayer Clinic with more financial flexibility to assist taxpayers.

• Mandating timely processing of claims for refunds or credits by the IRS.

These recommendations aim to strengthen taxpayer rights and improve tax administration. In conclusion, while the IRS has made commendable progress in enhancing taxpayer services, the report highlights the need for continued efforts to address processing delays and identity theft resolution to ensure a fair and efficient tax system for all.

References:

AP News. (n.d.). Associated Press News: Breaking news: Latest news Today. AP News. https://apnews.com/

Newsroom. Taxpayer Advocate Service. (2025, January 13). https://www.taxpayeradvocate.irs.gov/reports/2024-annual-report-to- congress/newsroom/