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TaxWatch: IRS to activate second ‘surge’ team to handle millions of backlogged tax returns

Two weeks ago, the Internal Revenue Service said it was reassigning 1,200 staffers as a “surge team” of reinforcements tasked with cutting into a backlog that included millions of unprocessed returns from last year.

Now it’s calling in even more reinforcements as the pending paperwork has expanded to include tax returns filed this year.

“The IRS is working quickly to engage a second surge team to help alleviate inventory backlog and best serve taxpayers,” the agency said in a statement Thursday. The IRS said it is “exploring every avenue to help reduce the inventory of tax returns while working to have a strong filing season.”

The agency has also halted sending out certain notices to taxpayers to try tamping down on taxpayer aggravation.

It wasn’t immediately clear how many employees are included in this second wave of reinforcements.

The first wave of reassignments was “an important first step,” Erin Collins, the IRS’s national taxpayer advocate, said at a Senate hearing Thursday. The second wave provides “additional resources on the processing challenges,” she said.

To be clear, Collins says this tax season is still going to be a challenge.

As of early February, the IRS had 23.5 million tax returns and correspondence that had to be manually processed. That includes 3.1 million paper returns already received in 2022.

“They can move all these employees over. It’s still going to be a very time-consuming challenge,” Collins told senators.

What’s at stake isn’t a mere paper push for an agency that had almost 82,000 employees in fiscal-year 2021. People and businesses are depending on the IRS to process the long-pending returns, and often to send along a much-needed tax refund. Throughout Thursday’s hearing, senators reiterated that they’ve been hearing from constituents with refunds that are snagged in the backlog.

The backlog dates back to the pandemic’s early days, when the IRS temporarily closed its operations. That put the agency behind the eight ball during two years when it’s had to juggle the distribution of stimulus checks, child tax credit payments and changes to the tax code.

Also Thursday, the IRS said it was cancelling a plan to close an Austin, Texas-based processing center.

The center was supposed to close in 2024, based on pre-pandemic plans aimed at streamlining operations. That would have left the IRS with processing centers in Kansas City, Mo. and Ogden, Utah.

“The IRS will be keeping all three processing centers open to ensure there is sufficient capacity to best serve the nation’s taxpayers and process returns and taxpayer correspondence in a timely manner,” the agency said in a statement.

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