There are several challenges which you may face while filing your tax returns. In fact, studies have shown that almost 30 percent of all taxpayers suffer from one or more challenges while filing their tax returns annually which causes them to make serious mistakes on some count or the other. Challenges include several issues like delays in getting refunds, confusing audit summons, and so on. In this article, you will learn about some of the most common challenges that you may face while filing your tax returns and how to deal with them.
1. Customer Service Issues
The IRS had received over a hundred fifty million telephone calls in the last financial year of 2019-2020. However, the customer care representatives answered only about one-third of the calls. As a result of this, Congress has decided to increase the budgetary funding to the IRS so that more staff can be hired in order to provide for a better customer service experience.
2. Old Technology
The IRS has made an estimate that they will need several years to update and improve their technological infrastructure. This will cost about three billion US dollars. However, if this plan comes to fruition then the old tax agency will get a new lease of life and the tax collection process would be more efficient. But the success is wholly dependent on the additional funding which the IRS needs. The IRS had earlier spent about three hundred million dollars to implement its developmental plans in 2018. But, this amount needs to be increased in order for the old technology to be replaced completely.
3. Staffing Problems
The IRS has a lot of issues with its small staff. In fact, with their shrinking budget, the number of people working for the revenue department has reduced greatly. This has increased the workloads for the existing employee. In the last ten years, the budget for the IRS was cut by about twenty percent and hence, there was a shortage of workers. This has led to lower efficiency in the functioning of the department.
4. Delays In refund
The IRS has in place specific filters to help prevent all types of refund frauds. However, they have also delayed disbursing the refunds to legitimate taxpayers. This can cause a lot of difficulties for several people. This has to be sorted out as quickly as possible.
5. Untrained Workers
The IRS has a lot of untrained workers. In fact, the evolution of the financial industry has enabled the easy admission of several untrained workers to come and join the workforce at the IRS. Thus, people without adequate knowledge of tax laws, business finances, business taxation, and so on join the IRS. While attorneys and accountants need to pass specific exams to be certified as professionals, unfortunately, there are no such rules in place at the IRS. There is also no system of federal licensing programs to certify good IRS workers. Thus, taxpayers are suffering from a lack of professional guidance in the IRS.
6. Process of Appeals
The IRS’s Office of Appeals was formed as back as 1927, and its aim was to resolve all types of disputes without any litigation. The appeals office, however, also includes their counsel and compliance teams in certain specific conferences where the consent of the taxpayer is not taken. This has been criticized because the Appeals officers can have a lot of difficulty in being able to draw any independent conclusions which vary from the positions which are taken by the compliance teams. This undermines the process of a fair appeal process for the taxpayer.
7. Confusing Audits Summons
The IRS uses a combination letter that includes the initial contact letter with a 30-day notice in several of the audits which were conducted in the last ten years. As a result of this, the taxpayers are getting insufficient time if they want to file audits and provide their documentation for resolving any issues.
You can use an online Income Tax Return Calculator if you want to get by these problems and file your income tax without any mistake.
Income tax returns have a lot of difficulties and with a professional tax advisor, you can be sure to file your tax returns correctly.