With American taxpayers facing a chaotic tax-filing season, top Oversight Subcommittee Republican Rep. Tom Rice (R-SC) warned that more government spending will not resolve the crisis of a backlog of 16 million tax filings at the IRS, and urged immediate action to help American taxpayers in a Ways and Means Oversight Subcommittee Hearing.

Key excerpts from Mr. Rice’s remarks appear below.

• “Millions of families can’t get calls answered by the IRS and some of them have even received collection notices despite being tax compliant because their returns are still buried in the backlog.”

• “The IRS has over $1 billion in unobligated funds that it received last year from the American Rescue Plan. In January I sent a letter along with Representatives Brady, Granger, and Womack to the IRS Commissioner asking why the agency hasn’t spent these funds to resolve or mitigate the backlog. We have not received a satisfactory answer and just last week we sent a follow-up letter.”

• “Just last week, former Taxpayer Advocate Nina Olson published an op-ed in the Washington Post making several recommendations […] I’m concerned that the agency is not taking this as seriously as it needs to. Ms. Olson makes the following recommendations:

• “Pause audits for four months and repurpose audit personnel to work the backlog.

• “Classify IRS employees as essential workers so that employees can be required to report to work in person at return processing centers.

• “Deploy all available enforcement personnel to work on the backlog.  

• “Bring back retired audit and collection employees to help the agency this filing season.

• “Utilize technology to reduce tax return manual returns.

• “These recommendations are all worth consideration given the scope of the problem and the number of taxpayers impacted by the current backlog.”

Rep. Rice’s full remarks as prepared for delivery appear below.

Thank you, Mr. Chairman, and thank you for holding this hearing today.

 

I’d like to thank our National Taxpayer Advocate for being here to address the crisis the IRS is facing this filing season.  

 

And let me begin by emphasizing that the current situation is truly a crisis.

 

The latest data provided to us by the Treasury Inspector General for Tax Administration shows that the IRS has a backlog of around 16 million unresolved 2021 tax returns.

 

That is 16 million individuals, families, and businesses, many of whom have been waiting on a much-needed refund for months with no end in sight.

 

That is millions of families who can’t get calls answered by the IRS and some of them have even received collection notices despite being tax compliant because their returns are still buried in the backlog.

 

Meanwhile, we understand that the IRS has over $1 billion in unobligated funds that it received last year from the American Rescue Plan.

 

You heard that right. The IRS has over $1 billion in funding that it appears to be saving for a rainy day. Well, I have a message for the agency – that rainy day is now.

 

I expect we will hear some on this dais say that the IRS needs more money. I would suggest that money is not the problem, and if it is, the agency certainly has a huge pile of it sitting around.

 

In January, I sent a letter along with Representatives Brady, Granger, and Womack to the IRS Commissioner asking why the agency hasn’t spent these funds to resolve or mitigate the backlog.

 

We have not received a satisfactory answer, and just last week, we sent a follow-up letter.  

 

Mr. Chairman, I ask that both letters be made a part of the record.

 

We need the IRS to take drastic action to address this problem and I’m concerned that the agency is not taking this as seriously as it needs to.

 

Standard operating procedure and basic bureaucratic adjustments won’t get the job done.  

 

Just last week, former Taxpayer Advocate Nina Olson published an op-ed in the Washington Post making several recommendations that align with the drastic action that me and my colleagues have been calling for.

 

Mr. Chairman, I ask that Ms. Olson’s op-ed be made part of the record.

 

Ms. Olson makes the following recommendations:

 

• Pause audits for four months and repurpose audit personnel to work the backlog.

• Classify IRS employees as essential workers so that employees can be required to report to work in person at return processing centers.

 

• Deploy all available enforcement personnel to work on the backlog.  

 

• Bring back retired audit and collection employees to help the agency this filing season.

 

• Utilize technology to reduce tax return manual returns.

 

These recommendations are all worth consideration given the scope of the problem and the number of taxpayers impacted by the current backlog.

 

To be honest, I am a bit hesitant about pausing all audits. That would be a serious action that would have a serious impact on the agency.

 

But in the end, I think this is the type of drastic action that should be considered to mitigate the problem. That is how serious the current crisis is.  

 

On the issue of additional IRS funding, Ms. Olson wrote the following: “long-term funding for new hires will not bring immediate relief to beleaguered individual taxpayers or get them their tax refunds any quicker.”

 

The IRS announced last week that it has taken some steps to redeploy certain IRS employees to work on the backlog. The agency estimates this redeployment will involve up to 1,200 employees.  

 

This is good news and a step in the right direction, but I suspect additional actions will be needed to make a real dent in the massive backlog and more long-term funding is not the answer.

 

Ms. Collins, thank you for being here. I look forward to your testimony and the opportunity to ask questions.

 

Thank you and I yield back.