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GAO: IRS Continues to Have Timeliness Issues With Its Live Service Despite Improvements


Although the IRS has implemented improvements to its customer service and systems,  a U.S. Government Accountability Office (GAO) Jan. 30 report said that the agency is still facing challenges processing tax returns in a timely manner.

The IRS established a 13-day processing goal for individual paper returns. However, it averaged 20 days instead. Additionally, the IRS' responses to taxpayer mail remained delayed, with 66% considered late at the filing season's end. The agency has a webpage that shows the receipt date of taxpayer mail it is processing, although the webpage did not offer any timeframe for when taxpayers should expect a response.

Previously, the GAO suggested that the agency address shortfalls and communicate timeframes for processing its correspondence backlog.

In the 2024 filing season, the IRS processed 98 percent of the close to 174 million individual and business tax returns it received, as of April 19, 2024.

Previously, in January 2024, GAO reported that IRS faced similar challenges processing paper returns in the 2023 filing season and suggested that the IRS find out the cause and address processing shortfalls. To respond, the IRS changed its reporting methodology in June 2024 to take into account days where the IRS is waiting for taxpayer responses. But the IRS has not yet documented the cause for the shortfalls.

The IRS generally improved its customer service to taxpayers compared to 2023, serving more taxpayers on the telephone and in person. However, IRS responses to taxpayer mail continue to be delayed, with 66 percent considered late at the filing season's end. In March 2024, the  IRS started a web page showing the receipt date of correspondence that IRS is currently processing. The web page does not provide information estimating how long taxpayers can expect to wait for a response once processing starts. Fully addressing GAO's 2022 recommendation to estimate and communicate time frames for resolving correspondence delays will better set expectations for, and possibly lessen repeat taxpayer inquiries.

In the fiscal year 2024, the IRS utilized the Inflation Reduction Act (IRA) funding to staff and start modernizing some filing season operations. IRS officials noted that this helped better customer service in the 2024 filing season. IRS also utilized IRA funding for modernization efforts including mail sorting and scanning machines.

In the annual tax filing season, the agency's processes millions of tax returns and issues hundreds of billions of dollars in taxpayer refunds. It also offers telephone, correspondence, online and in-person services to millions of taxpayers, according to the GAO. Partly because of the COVID-19, the IRS has faced challenges in recent years processing tax returns, meeting taxpayer service demands and hiring employees. The IRA gave IRS billions of dollars in funding to make improvements here and other areas.

The GAO was asked to review IRS's 2024 filing season performance. This report looked at IRS's performance processing tax returns, examined IRS's performance offering customer service and describes the agency's efforts to improve service and processing. The GAO examined IRS documentation and data and interviewed officials. The GAO determined that these data were reliable enough by reviewing IRS documentation and interviewing officials. The GAO also visited two IRS processing facilities whiled holding discussion groups with IRS staff.

Previously, the GAO has gave six key recommendations related to improving returns processing and customer service performance.

The agency generally agreed and fully implemented one while taking some steps to implement the others. To fully implement the GAO's remaining suggestions, IRS has to determine the cause of and address processing shortfalls. It also must communicate time frames for processing its correspondence backlog, aside from other actions. The IRS stated that it is focused on improving service.