In an effort to reduce its unprecedented backlog of unprocessed returns, the Internal Revenue Service recently announced it would be hiring 10,000 new workers. The hires would be a combination of regular employees and temp labor.
Its current backlog of 20M pieces of correspondence is 15 times larger than during a normal filing season. The agency’s current workforce is still at a 1970’s level, even though our population and the workload at the Service has increased significantly over that same period.
This increase in employment is financed by $1B in additional funding from the American Rescue Plan and an increase in their annual budget to $12.6B. The increase reflects the largest annual increase in IRS Funding since 2001.
The plan to attack the current backlog includes a 700 person surge team for return processing at specific service centers and 2,000 temp agency workers to respond to taxpayer questions about child tax credits and other stimulus money. They also plan on developing new automated voice systems to answer taxpayer inquiries.
If I were you, I wouldn’t get too excited about this.
Any entrepreneur will tell you that staffing is one of the most difficult tasks any organization will ever have. It takes months to hire and train a good person.
Imagine how long it would take to put 10,000 in place. The IRS correspondence response times of six to twelve months will probably continue into the foreseeable future.
The question becomes what will happen after the current backlog is handled?
Will those additional workers remain in return processing? Of course not. They won’t be needed there. Will they then be re-trained and transferred to enforcement where they will significantly increase the number of audits? Probably.
It looks like our new administration found a way to get their new hires at the Service, even though Build Back Better was blocked. This simply makes the quality of your tax work even more necessary in the future.
Don’t kid yourselves, my Brothers and Sisters. They’ll be coming.
Let me leave you with this.
It’s March 15th. Your S Corp and Partnership returns are due today.
If you’re one of our clients, your return was either completed or has been extended. If it was extended, that gives us an automatic six month extension to September 15, 2022 to file your 2021 return.
I mailed the extensions myself. You don’t need to do anything at the federal level. Further, that federal extension automatically extends the due date of your state return as well.
This extends the due date of the “paper return” only. It doesn’t extend any due date for payments. If a payment is due with your return and a deposit isn’t made by the end of today, you will pay a penalty.
The tax due on Illinois S Corp and Partnership returns is 1.5% of taxable income. This deposit can be made electronically at
Mytax.Illinois.gov
If you have difficulties making a deposit, please contact our offices today.
This isn’t the first time that this has been mentioned in any of our communications. The deadline ends today at 5 pm. After that time, if any payment is due without a deposit, you will pay a penalty.
It’s been quite a while since I’ve been able to write anything. To say that the last couple of weeks have been busy is the understatement of the century, but know that we are here to help you.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, PPP Loan Forgiveness, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.