Newsletters

GAO: IRS Faced Multiple Challenges During 2021 Tax Filing Season, GAO Report: Tax Filing—2021 Performance Underscores Need for IRS to Address Persistent Challenges (GAO-22-104938)

The Government Accountability Office (GAO) has issued a report on IRS’ performance during the 2021 tax filing season. The report assessed IRS’ performance during the 2021 filing season on: (1) processing individual and business income tax returns; and (2) providing customer service to taxpayers. GAO analyzed IRS documents and data on filing season performance, refund interest payments, hiring and employee overtime. GAO also interviewed cognizant officials.

Report Findings

GAO found that the IRS faced multiple challenges and struggled to respond to an unprecedented workload that included delivering COVID-19 relief. The IRS began the 2021 filing season with a backlog of 8 million individual and business returns from the prior year. The IRS reduced the backlog of prior year returns, but in December 2021, had about 10.5 million returns to process from 2021. The IRS suspended and reviewed 35 million returns with errors primarily due to new or modified tax credits. GAO found that some categories of errors occur each year, however, the IRS does not assess the underlying causes of taxpayer errors on returns. Additionally, the IRS paid nearly $14 billion in refund interest in the last 7 fiscal years, with $3.3 billion paid in fiscal year 2021. However, the IRS does not identify, monitor, and mitigate issues contributing to refund interest payments.

Recommendations

GAO made six recommendations, including that the IRS should assess reasons for tax return errors and refund interest payments and take action to reduce them; modernize its “Where’s My Refund” application; address its backlog of correspondence; and assess its in-person service model. The IRS agreed with four recommendations and disagreed with two. The IRS said its process for analyzing errors is robust and that the amount of interest paid is not a meaningful business measure.

FL - Guidance issued on catastrophic event property damage

Florida provides guidance on catastrophic event property damage for property tax purposes. Topics discussed include the payment of property taxes, […]

Read More
FL - Guidance issued on catastrophic event property damage

FL - Tax relief provided for taxpayers affected by Hurricane Idalia

In response to Hurricane Idalia, eligible taxpayers that file Florida corporate income tax returns with original due dates or extended […]

Read More
FL - Tax relief provided for taxpayers affected by Hurricane Idalia

IRS Warns About ESOP Compliance Issues, IR-2023-144

As part of ensuring high income taxpayers pay what they owe, the IRS warned businesses and tax professionals to be alert to […]

Read More
IRS Warns About ESOP Compliance Issues, IR-2023-144

Rates Used in Computing Special Use Value Issued, Rev. Rul. 2023-15

The 2023 interest rates to be used in computing the special use value of farm real property for which an election is made under Code Sec. 2032A were issued by the IRS. In the […]

Read More
Rates Used in Computing Special Use Value Issued, Rev. Rul. 2023-15

Taxpayers Reminded of Identity Protection PINs' Importance, IR-2023-134

The IRS has reminded taxpayers about the IRS Identity Protection PIN opt in program to help protect people against tax-related identity theft. “The Identity Protection (IP) PIN is […]

Read More
Taxpayers Reminded of Identity Protection PINs' Importance, IR-2023-134

Contractors Reminded of Expanded New Energy Efficient Homes Tax Credit, IR-2023-142

The IRS has reminded eligible contractors who build or substantially reconstruct qualified new energy efficient homes that they might qualify for a tax credit […]

Read More
Contractors Reminded of Expanded New Energy Efficient Homes Tax Credit, IR-2023-142

IRS Reminds Educators About Expense Deductions in 2023, IR-2023-150

The IRS has reminded eligible educators that they will be able to deduct out of pocket classroom expenses upto $300 while filing their federal income tax returns next year. […]

Read More
IRS Reminds Educators About Expense Deductions in 2023, IR-2023-150

FL - Guidance provided on 2023 tax holiday for tools used by skilled trade workers

Guidance is provided regarding the Florida sales tax holiday on tools commonly used by skilled trade workers, which is held […]

Read More
FL - Guidance provided on 2023 tax holiday for tools used by skilled trade workers

FL - Highlands County tourist development tax rate hike announced

The Florida tourist development tax rate in Highlands County is increased from 4% to 5% effective August 1, 2023. Combined […]

Read More
FL - Highlands County tourist development tax rate hike announced

IRS Optimizing Service and Strengthening Enforcement, IR-2023-126

The IRS delivered dramatically improved service in 2023 filing season and continues to build on this progress by focusing on critical work across the […]

Read More
IRS Optimizing Service and Strengthening Enforcement, IR-2023-126