January 30, 2025 - GAO recommends improvements to IRS
On Jan. 30, the Government Accountability Office (GAO) released its findings regarding the IRS's readiness for the 2025 tax season. The GAO report reviewed IRS customer response times both by phone and by mail in addition to reviewing 2024 tax return processing times. Although the IRS has recently modernized its systems using funds received from the Inflation Reduction Act (IRA), the GAO found the agency has not improved its speed for processing mail despite new sorting and scanning machines. While the IRS has hired more staff to assist in return processing and customer service, the GAO found the IRS has not done enough to significantly address the delays.
The IRS has processed 98% of the 174 million individual and business returns filed by April 2024. However, the general processing time for a paper-filed return was 20 days, a week longer than the IRS's goal of 13 days. Even with the ability to file more business forms electronically, the IRS has not been able to reduce the wait time for those returns that must be mailed in or that require additional correspondence.
The IRS website now allows an individual or business taxpayer to see when their mail or documents were received, which is a great improvement from previous years. Unfortunately, there is no information on when they can expect an IRS response. The GAO recommends that the IRS determine what is causing its processing shortfall and correspondence backlog of nearly 6.9 million as of November 2024. These recommendations are in line with the six key improvements the GAO identified when reviewing the IRS' efficiency in June of 2022. Those six items were as follows:
- Improving taxpayer services
- Reducing tax fraud and improper payments
- Improving cybersecurity
- Enhancing information reporting
- Improving audit effectiveness
- Enhancing strategic human capital management