In March, the IRS reported being chronically underfunded for more than a decade, with its budget cut by nearly 20% since 2010.
The agency noted a “historically low level of funding,” which has resulted in operations not being equipped to provide adequate service.
Officials at the agency also noted that the pandemic had created new operational challenges, including the IRS being called upon to distribute three rounds of Economic Impact Payments to 85 percent of American households.
“These circumstances have created significant challenges. Entering a normal filing season, the IRS typically has well under one million pieces of inventory,” the agency said in a statement. “This year, the IRS entered the filing season with a backlog more than 15 times as large.”
Rep. Gerald E. Connolly (D-Mass.), chair of the House Subcommittee on Government Operations, scheduled a virtual hearing Tuesday morning to examine the operations and financial condition of the IRS.
National taxpayer advocate Erin Collins and IRS Commissioner Charles Rettig planned to participate in the hearing, in which officials planned to address how the agency will fare this tax season specifically.
Connolly noted that the agency processes more than 150 million individual and business tax returns each year.
“But as it heads into the 2022 tax season, the agency is still struggling to address a massive backlog of more than 23 million pieces of correspondence related to the 2020 tax season, including tax returns waiting to be processed, suspended returns, and returns that were amended,” he said in a statement.