IRS updates on 2022 filing season

The IRS issued a press release today with some information about the upcoming filing season. Here’s a couple highlights:

  1. Season is expected to officially open on Jan 24 when the IRS expects to begin accepting electronic returns.
    Hint from Peter: All tax software has to do testing with the IRS. The final part of that testing is sending small batches of live returns. So if your situation is relatively simple and you have all of your information ready, you can often submit your return to the software provider starting a few days before this official start date and have a chance to be in those test batches. However, this will not speed your refund. Refunds for these test returns are sent at the same time as returns which are submitted in the first days after filing officially starts.

  2. The filing deadline this year is April 18. Why? Local holiday in DC. Send your thanks or complaints to the DC city council who made Emancipation Day a holiday. And if you are in Maine or Massachusetts, your deadline is April 19, thanks to Patriots’ Day.
    Peter’s note: I’m pretty sure the Patriots here are the historical ones from the mid 1770s, and not the football team, although there are likely local football fans who would disagree.

  3. If you have some prior year returns that aren’t filed, returns for 2020 and 2019 can be electronically filed - again after Jan 24. Returns older than that must be filed on paper. Electronic filing is preferred since the IRS has a huge backlog of unprocessed paper returns.

  4. Free File will be available beginning Jan 14. That’s the IRS program to help lower income people with simple returns meet their filing obligations.
    Peter’s note: The process is outsourced to commercial software providers. So watch out when it comes to state returns. Many people have complained (some of them here in this forum) about significant charges to file state returns. And the same thing can happen with the Federal return if you don’t meet the qualifications for the program. So keep an eye on the fine print, and check your state for any free filing options they may provide.

  5. The IRS started sending letters to people who received advance Child Tax Credit payments and the third Economic Impact Payment during 2021. Letters started going out in December, and are still being sent now.
    Peter’s note: PLEASE keep this letter and treat it the same as you would your W-2 or a 1099! It’s a part of your tax records. If you get one of these letters, the IRS will expect you to report the information on your return. And if you don’t report it, there will be delays in processing your return. So if you believe the IRS has made an error, don’t just report what you think is right. Call the IRS (or, better yet, check your account with them on-line) to resolve the discrepancy.

Almost forgot - here’s the official news release from the IRS if you want to read the details for yourself. (Something you should do rather than just trust some anonymous internet poster like me.)
https://www.irs.gov/newsroom/2022-tax-filing-season-begins-j…

–Peter

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Axios sent an email with this synopsis (highlights?):
The IRS is in trouble, which means getting your tax refunds on time may be too.
Why it matters: Staff shortages are creating a nightmare scenario at the Treasury Department, officials said today.

The unprocessed case backlog is “several times” as big as past years.

Understaffed call centers are mostly failing to respond to taxpayers in need of help, The Washington Post reports.
Processing centers for paper returns were affected by COVID-19, the agency said.
The stimulus created new work, including the Child Tax Credit expansion that could complicate tens of millions of returns.
What it means for you: Your refund might be delayed. If you file via paper form, that might be delayed as well.

This year’s deadline is April 18 for most filers.
The big picture: The IRS workforce is “now the same size as it was in 1970,” The Post notes.

The agency’s budget has been cut by about 20% over the last 10 years.
Democrats have tried to push through big budget increases for the IRS, against Republican opposition.

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The big picture: The IRS workforce is “now the same size as it was in 1970,” The Post notes.

That actually doesn’t scare me. In 1970, every return had to be keypunched into the IRS system by hand. Today, about 90% of returns are electronically filed. So all of those keypunch operators are no longer needed. They still need a bunch of them, of course.

Let’s try some rough numbers. In 1970, the US population was about 205 million. Today is something a bit over 330 million. That’s (click, click, tap, tap) about 60% more people. For some odd reason, I remember that there were about 170 million returns filed for 2019. (Heard it somewhere reasonably official, and it stuck in my head, probably dislodging something important, like my son’s name. I think it begins with an A. Or maybe a K. I’ll have to ask him. [smile])

So let’s run that backward, assuming the number of returns filed scale fairly well with population. That would make about 106 million returns back in 1970. All processed by hand. About 170 million today with 90% e-filed, means that 17 million (I can still do that in my head!) returns need to be processed. Ignoring any efficiency improvements at the IRS (since there may not have been any [insert shock face emoji here]), they’d only need 17 divided by 106 or about 16% of the employees they used to need to process paper tax returns.

That’s a significant drop. And that’s probably the most labor intensive part of the IRS work.

–Peter

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In 1970 there were 66,000 IRS personnel, of which 21,500 were involved in data processing. (https://www.irs.gov/pub/irs-soi/70dbfullar.pdf) Turns out there were 74.3 million returns filed in 1970, down 1.5 million from 1969, due to effects of the Tax Reform Act of 1969. (https://www.irs.gov/pub/irs-soi/70inar.pdf). That’s roughly 3,000 per full time employee. Not only were all of these returns entered by hand, many of them were handwritten by the taxpayer, not typed or otherwise printed. The need for data entry quality control/review was significantly greater than is needed for data entry from machine printed returns.

In 2019, there were 73,500 full-time equivalents, of which 23,500 were involved in Filing and Account Services (https://www.irs.gov/pub/irs-pdf/p55b.pdf). I don’t know if this is functionally equivalent to the data processing classification of 1970. There were 154 million individual returns filed. (https://www.irs.gov/pub/irs-pdf/p55b.pdf). That’s roughly 6,500 returns per FTE.

I’m not sure what, if anything, this signifies, but those are the data.

Ira

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I’m not sure what, if anything, this signifies, but those are the data.

I can see 2 things it signifies.

  1. WaPo was a bit loose in saying that IRS staffing was the same as 1970. If my math is correct (and that’s a highly suspect thing these days), the current staffing is about 10% higher today. That’s significant in my book.

  2. My memory is off. Or you were looking at the e-filed returns for 2019 rather than total returns. Your 154 million returns is about 90% of my 170 million. Given that neither of us is still 30, I’m not sure whose memory or data reading skills are more fallible. But I’ll put my money on me being wrong.

–Peter

My stats are from the sources cited. I have no idea how complete they are or whether I may have misinterpreted any of what I read. The table I quoted from for 2019 also includes 22.2 million 1040-ES returns (no idea if that’s 22.2 million taxpayers, or 22.2 million quarterly vouchers).

Ira

The 2019 table I cited also indicates that 22.2 million 1040-ES returns were filed (in addition to the 1040 returns). I don’t know if 22.2 million reflects the number of taxpayers or the number of quarterly vouchers.

Ira

…probably dislodging something important, like my son’s name. I think it begins with an A. Or maybe a K. I’ll have to ask him. [smile])

No worries there. I’ve been on the receiving end of that confusion all my life. I was the third of three sons, and my mother used to have to run through the list sons’ name to get to mine whenever she was fixing to chew me out. Gave me a moment to prepare my excuses.

Then I married my wife, who had a father named Eric and a brother named Eric. Poor MIL was constantly confused whenever she wanted to address one or another of us. Dutiful men that we were, all of us together were diligent about answering whenever she called “Eric.”

I seem to have survived those tribulations.

Eric Hines

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I was the third of three sons, and my mother used to have to run through the list sons’ name to get to mine whenever she was fixing to chew me out.

I was the third of 4 sons, and my dad would run through the names. By the time he got to “Dammit you know who I mean!” the three non-offending brothers (two of whom, like my father, are named John) would have disappeared.

Tim

the three non-offending brothers (two of whom, like my father, are named John) would have disappeared.

My father’s first name, his father’s name and his father-in-law’s name were all John. He gave up and went by his middle name.

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No worries there. I’ve been on the receiving end of that confusion all my life. I was the third of three sons, and my mother used to have to run through the list sons’ name to get to mine whenever she was fixing to chew me out. Gave me a moment to prepare my excuses.

Being the oldest child, I never had that problem. Or blessing. I was the first name on the list, so never any time to prepare excuses. Probably got tagged for my younger siblings’ offenses a time or three as well.

Fortunately, they’ve more than made up for it in helping to raise my son, good old what’s-his-name.

—Peter

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I was the third of three sons, and my mother used to have to run through the list sons’ name to get to mine whenever she was fixing to chew me out.

I was the third of 4 sons, and my dad would run through the names. By the time he got to “Dammit you know who I mean!” the three non-offending brothers (two of whom, like my father, are named John) would have disappeared.

At least you were all the same gender :slight_smile:

My mother would generally start with several of her sisters’ names, then get to my cousin Shirley followed by my brother. Once she made it to his name, I knew I was next, but at that point, it was “whoever you are.”

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I was the first of 5 sons. Dad solved the problem easily by referring to us by number. Number 4, ‘GET IN HERE’ or Number 1 ‘STOP POKING YOUR BROTHER’ got immediate responses from the appropriate son.

Wayne

I am one of those frustrated tax payers. I filed my deceased mother’s 2020 tax return in March 2021 and when they finally processed the paper form as required due to being deceased, they sent the check to an invalid name which did not appear anywhere on the forms turned in. I sent in the invalid check as the bank indicated that it was a felony to cash it with the wrong name. So, I sent it back in October and have not heard a peep about it. I have tried every phone number I could find and can not reach a live person or even leave a message.

If anyone has a magic phone number that will allow me to reach someone at the IRS to find out what the status on this is please send it to me. I will accept other ideas to resolve this too if something other than the phone number. I can’t close the estate until this check gets deposited.

Just crazy that this is taking as long as it is for an error they created. I have no idea where they came up with the name used.

Don

One magic number is that of your Congressman or Senator.

I’ve had rare occasions to need to go that route (never with the IRS, but once with the Post Office), but I’ve always gotten relatively prompt satisfaction.

Eric Hines

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