Gottheimer Warns of Massive Tax Return Backlog, Launches New “taxpayer Action Plan”

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PARAMUS, NJ — Today, February 28, 2022, Congressman Josh Gottheimer (NJ-5) spoke at the IRS Taxpayer Assistance Center in Paramus to raise awareness about the large backlog of tax returns that is keeping money out of the pockets of hardworking Americans in North Jersey and across the country. Gottheimer revealed his Taxpayer Action Plan to help reduce bureaucratic red tape at the IRS, as well as how he and his staff had clawed back $1.2 million in tax refunds for North Jersey families over the last two years.

Gottheimer was joined by three Fifth District residents — Jay Hirschhorn, Stewart Bard, and Nile Hagag — who had waited months, and in some cases more than a year, to receive what was rightly theirs: their tax return. He was accompanied by Bergen County Commissioner Mary Amoroso and Ralph Thomas, the CEO and Executive Director of the NJ Society of Certified Public Accountants.

Gottheimer’s Taxpayer Action Plan comprises the following steps:

  • Demand that the IRS reform their obsolete system and develop an immediate plan to efficiently and effectively handle the backlog of millions of tax returns addressed to them.
  • Request that the IRS increase funding for the Taxpayer Advocate Service, an office inside the agency dedicated to the interests of taxpayers, including hiring and training more taxpayer advocates.
  • Upgrade the archaic, out-of-date IRS tax processing equipment developed in the 1960s;
  • Request that the IRS report to Congress within the next 30 days on their plan to address the backlog.
  • Assist the Fifth District in reclaiming their tax refunds by working one-on-one with citizens and families to locate their tax returns and accelerate the refund process.

Gottheimer has led several efforts in recent months to urge IRS Commissioner Charles Rettig and U.S. Treasury Secretary Janet Yellen to create an action plan to address the massive backlog and to increase resources at the Taxpayer Advocate Service, including hiring and training new taxpayer advocates.

 

taxplayer action plan

 

“The IRS bureaucracy is costing taxpayers like Stewart Bard thousands of dollars that they are owed in their tax returns.” “That’s money to assist pay for groceries, a winter coat, home heating expenses, or car repairs,” said Congressman Josh Gottheimer (NJ-5). “It’s simply not right, and I’ve been all over the IRS and Treasury Department from my role on the Financial Services Committee.” That’s why, this morning, I’m presenting my Taxpayer Action Plan – to help remove the bureaucratic red tape that has contributed to the IRS backlog, get these returns completed, and your well-deserved funds back in your pockets.”

Currently, approximately 24 million American taxpayers, including families in North Jersey, are still waiting for the IRS to process their tax returns from last year, with many refunds being held up for nearly eleven months. Delayed IRS refunds and returns are impacting millions of Americans and small companies. When a tax return is delayed, a family may be unable to make a down payment on a house or apply for a student loan because they lack the requisite tax transcript.

Gottheimer has helped North Jersey families recover $1.2 million in tax returns since the outbreak began.

“I decided to contact Josh Gottheimer’s office and speak with Mike,” said Stewart Bard, a Westwood resident. “Thank God I talked to Mike and got the refund.”

“While we applaud the IRS’s recent actions to suspend certain notices and realign their employees to address the backlog of returns, more can and should be done,” stated Ralph Albert Thomas, CPA, CEO and Executive Director of the New Jersey Society of Certified Public Accountants. “I thank Congressman Gottheimer for his assistance in bringing the IRS service deficiencies to light for the benefit of taxpayers in New Jersey and across the country.”

Gottheimer’s prepared remarks:

# I’d like to thank Bergen County Commissioner Mary Amoroso, three Fifth District residents — Jay Hirschhorn, Stewart Bard, and Nile Hagag — and Ralph Thomas, CEO and Executive Director of the NJ Society of Certified Public Accountants for joining me here today in Paramus.

# We’ve gathered outside the IRS Taxpayer Assistance Center in Paramus today to raise awareness about the large backlog of tax returns that is taking hard-earned funds out of the pockets of Americans across New Jersey and the country. Currently, almost 24 million American taxpayers — including far too many families from North Jersey — are still waiting for the IRS to process their tax returns from last year, with many refunds being held up for nearly eleven months. Yes, you read that correctly – an increase of 24 million from the previous year. According to latest IRS data, the government has only caught up processing until April 2021.

# This year’s tax season began on January 24th. Instead of preparing new tax returns, the IRS carried over a backlog of six million unprocessed individual returns, 2.3 million amended individual returns, one million unprocessed employment tax returns, and half a million revised employment tax returns. To put this in context, around the start of a new tax season, there are generally only around 1 million unprocessed returns or fewer.

# Like most people, I believe that taxes in New Jersey are way too high, which is why, among other things, I’ve pushed so hard to reinstate the State and Local Tax Deduction, or SALT. However, the IRS bureaucracy is now costing folks like Stewart Bard thousands of dollars that they are owed in their tax returns. That’s money you could use to buy groceries, a winter coat, pay your heating costs, or repair your automobile. It’s just not right. And, as a member of the Financial Services Committee, I’ve been all over the IRS and Treasury Department.

# That’s why, this morning, I’m presenting my Taxpayer Action Plan — to help remove the bureaucratic red tape that has contributed to the IRS backlog, get these returns completed, and your well-deserved funds back in your pockets.

# First, I phoned the IRS and requested that they modernise their obsolete system and provide an immediate strategy to promptly and effectively process the backlog of millions of tax returns addressed to them.

# In recent months, I have written to IRS Commissioner Charles Rettig and Treasury Secretary Janet Yellen, pushing them to get their act together and develop a plan to address this tremendous backlog. I’ve also asked them to increase resources at the Taxpayer Advocate Service – an IRS unit committed to taxpayers’ interests, including hiring and training more taxpayer advocates — and to report to Congress within the next 30 days with their plan to fix this issue. The red tape is harming hardworking taxpayers.

# Second, as we wait for the IRS and Treasury Department to address these serious concerns, I’m taking steps to assist Fifth District constituents in reclaiming their tax refunds. My office and I have been working with our people one-on-one — day in and day out — to locate their tax returns and accelerate the process of collecting their refunds. We have assisted in the recovery of $1.2 million in tax returns for the citizens of North Jersey since the beginning of the pandemic. This does not include the millions that have been added since I was elected.

# Third, we must repair the obsolete IRS technology, which is out of date and requires quick replacement. The agency’s core system for processing individual tax account data was developed in the 1960s — yeah, when Gilligan’s Island was all the rage. Since then, Taxpayer Advocate Service has pushed the IRS for years to modernise its IT infrastructure, in order to get returns completed and checks out the door as swiftly as possible. Last year, the House enacted legislation that included funding to upgrade the IRS’s technology. It is now up to the Senate to take it up.

# Today, you heard from three residents who have firsthand experience with how difficult it can be to receive your tax refund on schedule from the IRS and the financial pressure it may impose on someone and their family.

Stewart Bard of Westwood filed his return in March 2021, asking a well-deserved refund of $3,600. However, the IRS remained deafeningly silent until August, when the agency eventually informed him that his return had been reduced by around a thousand dollars. Stewart did not dispute, and he called the IRS several times to find out where his refund was and constantly checked online for an update. He was never able to speak with anyone at the IRS. He was forwarded from one automated message to the next. Government bureaucracy at its worst!

Jay Hirschhorn of Fairlawn lost his mother in 2019, and her tax return check went missing, so he requested the IRS to give him a fresh check.

Nile Hagag of Park Ridge thought his return had been processed after checking the IRS website, but he received nothing. When we called the IRS to confirm, we discovered that the agency had no record of his filings.

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Here’s the good news –

And what we will do for any family in the Fifth District – we were able to work with each person here to track down their tax returns and get them the thousands of dollars in refunds they were due. They waited months – and in some cases more than a year – and, sadly, it took a phone call from me and my colleagues to assist them fight for what was properly theirs – their tax return. Their tax monies.

Again, these three people represent just a small sample of the more than $1.2 million in tax refunds my office and I have been able to recover from the IRS in the last two years – all fantastic victories for hardworking families across Northern New Jersey. That’s 1.2 million from the IRS in just the last two years — a new figure we’re revealing today. But the question is, how many more Jersey families, in addition to the 24 million countrywide in the last year alone, have been fleeced by the IRS?

I’m always willing to assist and battle the IRS on behalf of folks who aren’t receiving what is legitimately theirs. But it shouldn’t take me that long to pick up the phone. It should just happen. Unfortunately, this is not always the case.

Here are some additional facts: Three out of every four Americans receive a yearly tax refund from the IRS, which is frequently the largest check of the year for a household. As of February 18th, the average national refund was $3,536 – more than $700 more than last year’s payment of $2,815. In recent years, New Jersey has had a higher-than-average refund amount overall, and it has been among the states with the highest average tax refund.

These are funds that New Jersey taxpayers have earned and deserve after a year of hard work.

Last year, approximately 77 percent of taxpayers received refunds, and we anticipate that number to be comparable, if not higher, this year.

Let’s talk about the real-world repercussions of the IRS’s return backlog. When a tax return is delayed, a family may be unable to make a down payment on a home or apply for a student loan because they are unable to present the requisite tax transcript. It’s crazy — and these are real-world stories from my constituents.

That’s why, since being elected, I’ve made it a mission to fight to reclaim these funds for North Jersey households. We can’t let the IRS hold up money that should be in your pockets because red tape is impeding activity. The IRS has no authority to keep tax money that belong to the American people.

Again, I’m urging the IRS and Treasury to take quick action to clear the large backlog of unprocessed tax returns, including requiring the IRS’s Taxpayer Advocacy Service to hire and train more taxpayer advocates immediately in order to provide immediate relief to our taxpayers.

I’m also working with residents throughout the Fifth District, like Jay, Stewart, and Nile, who are here today, to guarantee that they receive their full federal tax returns.

What else, other from outmoded technology, has contributed to these large backlogs during the previous two years? Some of it is due to the typical COVID problems that every organisation faces: the IRS encountered office closures early in the epidemic, along with limited federal investment for the agency, more burden from COVID-19 projects, and, as I indicated before, staffing shortages.

The pandemic prompted huge turnover in several enterprises across the country. Manpower levels are down 22% from 2010, and after huge budget cuts during the previous Administration, the agency has the same level of staffing as it did in the 1970s – despite the fact that the U.S. population has grown by 60% since then. Its submission processing section — the staffers in charge of opening mail — lost 20% of its staff last year due to retirements, departures, and transfers to other IRS divisions.

In 2021, about 11% of the 282 million calls made to the IRS were answered – calls that Jay, Stewart, and Nile were making nonstop to try to get tax refunds.

That is why, with the new tax filing season in full swing and delayed IRS returns affecting millions of Americans and small businesses, as part of my Taxpayer Action Plan, I am calling on the IRS and Treasury Department to take critical steps to process the backlog and immediately get dollars into the pockets of American taxpayers. Let us be clear: this is not a party issue. It’s all about what’s best for all Jersey families.

Overall, I will continue to focus on affordability for Jersey families, such as assistance with gas, groceries, and utilities. This endeavour is part of my Affordability Agenda for Jersey, which includes addressing supply chain concerns, lowering prescription drug costs, and lowering taxes by restoring the State and Local Tax (SALT) deduction.

By all of us working together at every level of government to put more money back in the pockets of North Jersey families, here in the greatest country in the world, I know that our best days are always ahead of us.

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