In response to pressure from Congress, 1,200 IRS employees have been dispatched to sort and process millions of outstanding 2020 amended paper tax returns. IRS Commissioner Chuck Rettig says a separate team will tackle 2021 paper returns as they come in. The backlog has been caused, in part, because the IRS suspended approximately 35 million returns due to errors. But will the IRS’s action plan satisfy legislators? The National Taxpayer Advocate testified before the Senate Finance Committee that the agency also needs to provide temporary penalty relief to taxpayers, suspend collections and improve communications. In addition, she said the IRS needs sufficient funding to upgrade IT systems.
