Adjusting for inflation, the report says, the IRS’ budget has decreased by about 20 percent since 2010. The report notes that “he imbalance between the IRS’s workload and its resources has never been greater.” Since Fiscal Year 2010, the IRS’ workforce has shrunk by 17 percent, largely because of a yearslong hiring freeze between 20 as well as retirements. The agency will have to contend with the substantial task despite being understaffed and underfunded, according to the watchdog report. People might be owed more, for example, based on a change in income or dependents from one year to the next, Tulino said. In 2021, that aid consisted, in part, of the monthly Child Tax Credit payments and up to $1,400 in stimulus money, per person, in March.īoth filers and the IRS will have to pay close attention to make sure all the money is accurately reported and reconciled. The country’s federal income tax system is only about a century old, and never in its history has the government directly deposited so much aid into so many Americans’ accounts. There is no historical precedent for such a substantial shakeup to taxes, said Caroline Bruckner, a tax professor at American University’s Kogod School of Business. How will the pandemic affect this year’s tax season? Here’s what filers need to know as this year’s April 18 filing deadline approaches. “…The financial impact can range from mild inconvenience to severe financial hardship.”
That’s because many families rely on their tax refunds for “basic living expenses,” the report says. Collins, an independent government IRS watchdog, people with low incomes are most affected by refund delays. And according to a report released by National Taxpayer Advocate Erin M. That’s in part because many who don’t normally file, including very low-income people, did so in 2020 in order to claim an economic stimulus payments the government disbursed that year, IRS spokesperson Raphael Tulino said.Īround 75 percent of filers get refunds every year, Tulino said, and as of December, more than 6 million people were still waiting for refunds for their individual returns for the previous year. The agency expects more than 165 million to file this year. In 2021, more than 160 million people filed individual tax returns, the most ever, according to IRS data. Add 2021’s Child Tax Credits, stimulus money, unemployment checks and various other pandemic-related circumstances, and the filing process can become truly labyrinthine. Yet along with springtime whimsy comes tax season, and this year’s is stacked with complications for many tax filers.Įven in a regular, non-pandemic year, tax season can be complicated. The snow is melting, the days are warmer and daffodils are blooming.
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