Written by Dave Nyczepir
The IRS agreed to revamp its online Where’s My Refund tool to provide more information to taxpayers explaining the delays, in its response to a Government Accountability Office report released Monday.
A modernization plan and timeline will be developed with the Treasury Department and implemented based on available funds.
The IRS recognition comes after GAO found that modernizing the tool was not a funding priority for the agency until 2025, and user satisfaction had dropped to 24%, although it is the agency’s most frequently consulted application.
“It is important to note, however, that when we operate during periods of ongoing budget resolutions, funding requests for new work are suspended until our annual appropriations have been passed and the amounts available are certain,” reads -on in the IRS response to the GAO. report. “Operating during periods of ongoing resolutions can therefore impact the timing of implementing improvements and upgrades to our systems. »
Where’s My Refund currently lets users know that their return has been received and their refund has been approved and sent, sometimes with the dollar amount and any corrections, but there’s usually a 1-2 week wait between receipt of the return and approval of the refund. Users aren’t alerted if an error on their tax return forced a manual review, even though there were 35 million such cases in the 2021 filing season.
The lack of information has resulted in unprecedented call volumes, costing around $60 each, compared to 19 cents per online transaction, and taxpayers filing a second return in some cases.
Where’s My Refund is 20 years old and the last visible updates were made in 2013. The app does not access data sources for more detailed processing information due to cost and concerns about fraudsters using information to their advantage.
While the Treasury Department considers the app one of the IRS’ “highest priority” digital services in need of modernization, the GAO found that the IRS had no plans to update its satisfaction survey to collect more information about customer experience.
The IRS has responded that it will conclude research in May 2022 on user needs and expectations for refund status messaging and plans to make simple changes to Where’s My Refund: static messages explaining delays, a link to Frequently Asked Questions about delays if a refund took longer than 21 days, and making the same information available through online accounts and mobile alerts.
The GAO also recommended that the IRS develop a plan for in-person taxpayer services, given that it is expanding virtual customer service options, which the agency agreed to. In-person service has grown from approximately 752,000 taxpayers served in 2019 to 374,000 in 2021.
The IRS disagreed with the GAO that it needed a process to identify the underlying causes of taxpayer errors, arguing that its analysis is “robust” and that it does not could only speculate due to the limited information provided on tax returns. While the IRS uses error codes to find faulty programming in its processing, the same is not true for errors on tax returns.
“For errors that occur frequently each year, the IRS lacks a process to identify and analyze their underlying causes,” reads the GAO report. “This limits the IRS’ ability to reduce instances of recurring errors and anticipate potential future problems.”
The IRS also disagreed with the GAO’s recommendation that its business units should routinely report the amount and reasons for interest refunds, arguing that the amount was not a “meaningful” measure. The agency paid $3.3 billion in interest repayments in fiscal 2021.
Each year, the IRS handles more than 150 million tax returns, and in 2021 it started with a backlog of 8 million returns from the previous year, which caused delays in refunds. The IRS extended its filing deadline by a month to address the backlog, but still had 10.5 million returns to issue in December.
Taxpayer correspondence with the IRS tripled from 2 million messages in 2019 to 5.9 million in 2021, with no plan to address the backlog. The GAO recommended that the IRS periodically and publicly estimate its timelines for resolving the correspondence backlog in the future, which the agency agreed to.