IRS releases data on activities during COVID
The Internal Revenue Service released a Data Book Thursday highlighting the IRS’s activities this past fiscal year, particularly in response to the pandemic.
During the COVID-19 pandemic, the IRS developed new technology and furnished the equipment needed to allow thousands of its staff to work from home, enabling the IRS to resume processing returns and providing phone assistance to taxpayers. The IRS processed more than 240 million tax returns, and collected nearly $3.5 trillion in federal taxes during the fiscal year, approximately 96% of federal revenue from all sources.
The IRS needed to contend with numerous challenges during the pandemic, including a newly remote workforce and distributing millions multiple rounds of stimulus payments to aid the economy. In the first round, under the CARES Act, the IRS issued 161.9 million Economic Impact Payments, 122.5 million by direct deposit, 35.8 million by check, and nearly 3.6 million by debit card. Under the COVID-Related Tax Relief Act of 2020, part of the Consolidated Appropriations Act, the IRS issued 146.5 million second-round EIPs, including 112.8 million via direct deposit, 25.7 million by check, and 8 million by debit card. Combined, the IRS provided $412.9 billion in relief under these programs during calendar year 2020. It later distributed another round this year under the American Rescue Plan Act.
The agency also worked to ease burdens on people facing tax issues by extending the deadline to file and pay federal income taxes from April 15, 2020, to July 15, 2020.It launched a People First Initiative, which eased payment guidelines, postponed compliance actions and suspended most collection enforcement activities, such as new notices of lien or levy, from April 15, 2020, to July 15, 2020.
“We are focused on providing quality services that every American deserves, and being the best that we can be,” IRS Commissioner Chuck Rettig said Thursday during New York University’s online Tax Compliance Forum. “We’re similarly focused on the enforcement side. A lot of people have started a dialogue saying the administration, the IRS, is strictly focused on enforcement. The biggest part of the tax gap is voluntary compliance, and we intend to serve that community, the folks who want to get it right. We intend to be the agency that helps them get it right, with timely guidance that they can understand and being responsive to the needs of the communities that we interact with. And enforcement is sort of the back end of this, which is to support the compliant taxpayers. Compliant taxpayers need to know that we are on the watch, and that noncompliant taxpayers are at risk. Let me assure you that this agency is not vulnerable, that this agency understands and respects its challenges, but also understands and respects its mission, and we will do the best that we can do.”
During fiscal year 2020, the IRS issued more than $736 billion in tax refunds (including $268 billion in Economic Impact Payments). In fiscal year 2020, 59.5 million taxpayers were assisted by calling or visiting an IRS office, although many of the offices were closed last year, and both taxpayers and many tax professionals had trouble reaching the IRS by phone. Nevertheless, according to an IRS survey, 79% of taxpayers said they are satisfied with their personal interactions with the IRS.
“You have to have a lot of sympathy for an agency like the IRS,” said Mark Peterson, executive vice president of advocacy at the American Institute of CPAs, during an online AICPA Town Hall on Thursday. “It’s a huge challenge to deal with COVID. Think about security and working remotely. It relies on communicating with the taxpayers and the preparers, and they weren’t able to do that.”
An AICPA survey of its members was considerably less rosy than the IRS’s survey results. “This has been a huge challenge for them, so although we have empathy for them and what they have gone through, we also have to let them know that service has got to be addressed,” said Peterson. “What we saw in the survey was exponentially worse than we have ever seen before at every level. That’s not going to happen tomorrow.”
During the pandemic, the IRS encouraged people to use its website to get information, and IRS.gov received nearly 1.6 billion visits and taxpayers downloaded more than 437 million files.