Lankford Brings Oklahomans’ Frustrations with IRS Delays, Backlogs, and Filing Issues to Head of IRS

CLICK HERE to watch Lankford’s Q&A on YouTube.

WASHINGTON, DC – Senator James Lankford (R-OK) today participated in a Senate Finance Committee hearing entitled, “The 2021 Filing Season and 21st Century IRS,” in which he asked Oklahomans’ questions of the hearing’s witness, Internal Revenue Service (IRS) Commissioner Charles Rettig, about delays in processing tax returns due to COVID-19-related backlogs, issues surrounding Economic Impact Payments (EIP) and previous tax debt, and how to handle cryptocurrency with regard to taxes.

Lankford’s office has received hundreds of phone calls, emails, and casework requests concerning IRS issues over the last year and has heard from Oklahomans who are having trouble getting connected with IRS, via phone especially, to answer critical tax questions.

Excerpts

On the IRS backlog and delays

Lankford: Mr. Rettig, thanks for all the work. There’s a lot going on, to say the least. IRS is being tapped right now to both send checks when you’re really designed to be able to receive taxes and to be able to process those efficiently. There is a tremendous backlog right now that you’re working through, I understand. Can you give us an update on backlog and mail coming in and what the status is for being able to answer mail? We still get a tremendous amount of calls of people saying they’re calling the office saying they’re trying to get through as well. So help us understand the status on that.

Rettig: We are current on our mail, which means that we have a more typical backlog, which is about a million pieces of mail being processed. In terms of returns, we have about 1.7 million returns that came in during 2020, and that is a priority for us to get through those returns. In terms of level of service and the phone calls, the volume of inbounds has gone up probably as much as four times, depending up on the time of the day. I think I might have indicated earlier that we have received as many as 1,500 phone calls per second on some of the days. Our IRS.gov has had over one billion hits in calendar year ’21, and one of the issues is that the level of service and the staffing inherent with that is determined about two years in advance. That’s an appropriated item. We did get budgeted to bring onboard 1,000 people from the last Act, and those people are in training. It takes 14 weeks to train them to get them on the phones because obviously somebody who’s trained is better on the phones than someone who’s not trained. So all I can really say is: we appreciate the patience and understanding of everyone. We are operating, I used the term earlier, ‘all hands on deck.’ We are doing that everywhere. A lot of these activities—we cannot take somebody from one position and move them to another. One, we need them in that position, two they might not be trained. But what we have done, where people have moved off of a certain position and they were previously trained, we’ve taken those folks back into that position to try to do our best. And we get it that it’s far from perfect.

On EIPs and previous tax debt

Lankford: Economic Impact Payments, when they went out last year—folks who received those payments, fine, they received those. Others that didn’t receive them for whatever reason, they can then file them on their taxes. But what I’m finding from some of my constituents now is they filed on their taxes and they had outstanding debt, that debt is being withdrawn. And of course they’re calling our office and saying, ‘Hey, if I received the check, I would have just received the entire thing. If there was other debt that was outstanding, it’s being withdrawn from it.’ Can you help provide any clarity there?

Rettig: There are certain provisions and certain areas that allow for an offset as far as the EIPs with respect to tax debt. EIP1 was different than 2, and 3 was different than 1 and 2. Individuals should reach out to us if they’re in that. But essentially we’re following the law. We’re trying to do our best. Where we can exercise discretion, we’re exercising discretion.

On cryptocurrency and taxes

Lankford: Let me ask about cryptocurrency because I have folks that have asked about a very confusing aspect of our law, which is—again what I want to try to get from you is—what clarity is needed on this? Anytime a cryptocurrency is cashed in or changed into a fiat currency, it’s a taxable event because it’s property that’s actually moving into that. What would you suggest is the best place to be able to get information, and what do we need to do in Congress to be able to deal with the cryptocurrency issues and to be able to clarify what is a taxable event, nontaxable event, and how they can actually mange that?

Rettig: We have issued some guidance and will continue to issue guidance. We work with Treasury with respect to the issuance of guidance. And it’s not too dissimilar to other property-type issues and interests that people have… In terms of assistance to us in that arena, obviously reporting would be significant and huge helping us going forward…

Lankford: What would that look like for you getting more information reported?

Rettig: 1099s

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