In case it took an extra-long time to get your income tax refund last year, as was the case with millions of taxpayers, the IRS says it is likely (almost certain) to be worse in 2022. The IRS admits 2021 was its most challenging year ever and warns 2022 will be another bad year for taxpayers.
Long waits, delayed refunds and confusion made taxpayer interactions with the Internal Revenue Service, never the most joyous of exchanges, more frustrating than ever. And that could just be a warmup for what’s to come this year, says a new watchdog report.
Americans visited the IRS website, hoping to learn the status of their refunds, more than 630 million times last year. This left many in limbo as the tax agency fell behind in processing returns and responding to inquiries, according to the National Taxpayer Advocate, an independent organization within the IRS which came up with the findings.
While the problems, which ranged from poor telephone service to premature collection notices due to delays in processing taxpayer responses, were aggravated by the pandemic, their origin is actually in budget issues. From 2010 to 2019, Congress reduced the IRS budget from $14.6 billion to $11.5 billion, and its staff dropped from 94,000 employees to 73,000, according to Congressional Budget Office estimates.
The IRS started the 2021 season behind and never caught up. That situation is set to repeat in 2022, with an even bigger backlog of old returns. Paper returns took an average of 8 months to process last year. This year’s tax season begins next week on January 24. On December 23, the IRS said it still had 6 million unprocessed individual returns from 2021. FYI, returns filed electronically are processed faster.
“As the IRS is preparing to begin the 2022 filing season, it is poised to carry over millions of unprocessed returns and millions of pieces of taxpayer correspondence, resulting in even longer delays for taxpayers who have been patiently waiting for far too long,” the report read.
The bottom line is if you are planning to file for an income tax refund this year, you should do so as early as possible and be prepared to wait a long time before you get the check. I don’t see this problem getting a lot better anytime soon, unfortunately.
Biden To Make Important Federal Reserve Appointments
White House sources say President Biden is very disappointed he hasn’t had the opportunity to appoint any Supreme Court Justices, whereas former President Trump got to appoint three Justices during his one term as president. President Trump appointed Neal Gorsuch in 2017, Brett Kavanaugh in 2018 and Amy Comey Barrett in 2020.
President Biden has had no opportunity to fill a Supreme Court slot, and it is questionable whether an opening will come up during the remainder of his term. Democrats have been urging Justice Stephen Breyer who is 83 to retire so Mr. Biden can appoint his replacement, but Justice Breyer indicated last year he is not ready to retire anytime soon.
Yet even though President Biden hasn’t had any Supreme Court openings to fill, it does appear he will have the opportunity this year to make several important appointments to the Federal Reserve. While not on the scale of a lifetime Supreme Court Justice appointment, these Federal Reserve Board positions are important nonetheless, as they tend to serve for many years as well.
Most readers will recall that President Biden reappointed Fed Chairman Jerome Powell to a second 4-year term on November 22 – to the chagrin of many Democrats. Powell is a Republican appointed by President Trump back in 2018.
So, who is looking to retire from the Fed this year? President Biden already has three slots to fill on the seven-member Federal Reserve Board this year. Two Board members retired last year, Fed Vice-Chairman Richard Clarida and Randall Charles who oversaw bank supervision.
And of course, Mr. Biden is looking to fill the now vacant slot of Lael Brainard who he promoted to Fed Vice-Chair when he reappointed Jerome Powell to a second term as Chairman. So, the president has a busy year ahead even if no other Fed Board members decide to retire.
In addition, there are 12 Federal Reserve banks around the country, and there are currently two (Boston and Dallas) which have no President at the helm. President Biden needs to fill these key positions this year. Plus, in early 2023, two more Fed bank presidents will retire.
So, while President Biden doesn’t have any Supreme Court vacancies to fill, his plate is full of Federal Reserve officials who need to be selected to fill current vacancies this year and more early next year. Members of the Fed Board of Governors in Washington are chosen by the president and confirmed by the Senate.
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