Taxpayers face shutdown problems at IRS as filing season starts

A record-long partial government shutdown appears to have disrupted services for taxpayers at the Internal Revenue Service (IRS) as tax season got underway.

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According to a new report from the National Taxpayer Advocate, during the first official week of tax season – which kicked off on Jan. 28 – there was a “shocking” decline in services: Fewer than half (48 percent) of calls made by people looking for help filing returns were answered, while the average wait time was about 17 minutes. During the same period last year, 86 percent of calls were answered and the wait time was only about 4 minutes.

“These numbers translate into real harm to real taxpayers. The IRS will be facing tough decisions in light of the shutdown's impact,” advocate Nina Olson wrote in her annual report to Congress.

An additional 93 percent of people who called the IRS during the last week of January about arranging installment tax payments were unable to speak with an assistant.

The IRS' workforce faced a huge backlog — including 5 million pieces of mail to process —when it returned to full strength Jan. 28 after the 35-day partial shutdown, which had furloughed most of its employees.

There are concerns the agency may have been slower to process refunds, too. Between Jan. 28 and Feb. 1, 17 million refunds were processed, according to the agency, a decline of more than 25 percent when compared with the corresponding period last year (Jan. 29 to Feb. 2, 2018). It is worth noting that more than 12 percent fewer returns were received year-over-year.

The average refund so far during the 2018 filing season is $1,865, compared to $2,035 last year – a decline of 8.4 percent. The Treasury Department on Monday claimed that those numbers are in line with 2017 levels.

The IRS and the U.S. Treasury Department on Friday touted a “successful” start to the 2018 tax season, despite concerns this year’s filing process could be complicated by the 35-day partial government shutdown.

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“Filing season has successfully launched with millions of tax returns having been filed,” Treasury Secretary Steven Mnuchin said in a statement. “We thank the Treasury and IRS employees who have been working diligently to ensure the system is processing these returns efficiently.”

The report also flagged other problems at an agency that was already straining, even before the shutdown, from the burden of a complex new tax law, inadequate funding and antiquated computer systems.

The Associated Press contributed to this report.