alert-icon
Only limited material is available in the selected language. All content is available on the global site.
Wolters Kluwer Navigation
  • Solutions Directory
  • Careers
  • Investors

About Wolters Kluwer

Wolters Kluwer is a global provider of professional information, software solutions, and services for clinicians, nurses, accountants, lawyers, and tax, finance, audit, risk, compliance, and regulatory sectors.

About Us
  • About Wolters Kluwer
  • Strategy
  • Our Organization
  • Management
  • Supervisory Board
  • Value Creation
  • Events
Expert Insights
  • All Expert Insights
  • Health
  • Tax & Accounting
  • Finance
  • Compliance
  • Legal
Get Help
  • Contact Us
  • Login
  • View Solution List
  • eShop & Bookstores
  • Media Center
  • News & Press Releases
  • Solutions Directory
  • Careers
  • Investors
PrimaryNav Button
Wolters Kluwer Logo
Search Wolters Kluwer
    No Suggestion
    WK logo

    Visit our global site, or select a location

    • Americas
    • Europe
    • Asia & Pacific
    Brazil
    Home page:
    • Portuguese
    Canada
    Home page:
    • English
    • French
    Latin America
    Home page:
    • Spanish
    United States
    Home page:
    • English
    Current Page:
    • English
    Belgium
    Home page:
    • Dutch
    • French
    Czech Republic
    Home page:
    • Czech
    Denmark
    Home page:
    • Denmark
    France
    Home page:
    • French
    Germany
    Home page:
    • German
    Hungary
    Home page:
    • Hungarian
    Italy
    Home page:
    • Italian
    Netherlands
    Home page:
    • Dutch
    Norway
    Home page:
    • Norwegian
    Poland
    Home page:
    • Polish
    Portugal
    Home page:
    • Portuguese
    Romania
    Home page:
    • Romanian
    Slovakia
    Home page:
    • Slovak
    Spain
    Home page:
    • Spanish
    Sweden
    Home page:
    • Swedish
    United Kingdom
    Home page:
    • English
    Australia
    Home page:
    • English
    China
    Home page:
    • Simplified Chinese
    Hong Kong
    Home page:
    • English
    India
    Home page:
    • English
    Japan
    Home page:
    • Japanese
    Korea
    Home page:
    • English
    Malaysia
    Home page:
    • English
    New Zealand
    Home page:
    • English
    Philippines
    Home page:
    • English
    Singapore
    Home page:
    • English
    Taiwan
    Home page:
    • English
    Thailand
    Home page:
    • English
    Vietnam
    Home page:
    • English
    Primary Navigation
    • Health

      Trusted clinical technology and evidence-based solutions that drive effective decision-making and outcomes across healthcare. Specialized in clinical effectiveness, learning, research and safety.

      Health Overview
      Solutions
      • UpToDateClinical decision support resource
      • OvidThe world’s most trusted medical research platform
      • LexicompEvidence-based drug referential solutions
      • Sentri7Award-winning infection control and monitoring
      View All Solutions
      Challenges
      • Improving patient outcomes
      • Managing population health
      • Reducing healthcare costs
      • Optimizing telehealth and virtual care
      View All Challenges
      Expert Insights
      • Informal mentoring: The importance of carrying someone with you
      • Exploring tough questions in perioperative medical consultation: A hospitalist's guide
      • eEvidence-based practice has been around as long as hospitals — here are three ways you can make it better
      • Your quality improvement and evidence-based practice champions are MVPs — show them how much you value them!
      View All Expert Insights
    • Tax & Accounting

      Enabling tax and accounting professionals and businesses of all sizes drive productivity, navigate change, and deliver better outcomes. With workflows optimized by technology and guided by deep domain expertise, we help organizations grow, manage, and protect their businesses and their client’s businesses.

      Tax & Accounting Overview
      Solutions
      • Tax & Accounting U.S. HubCentral hub for all U.S. solutions
      • CCH Axcess™ SuiteCloud-based tax preparation and compliance, workflow management and audit solution
      • CCH® ProSystem fx®Integrated tax, accounting and audit, and workflow software tools
      • TaxWise®Tax Preparation Software for Tax Preparers
      View All Solutions
      Expert Insights
      • Individual Retirement Accounts: Mandatory amendment deadline moved back
      • Improving the quality of your audit with data analytics
      • Form 990-N filers must use a new sign-in process to file their annual reports
      • Tax pros can help extended filer clients by reviewing available tax benefits
      • Inflation Reduction Act of 2022
      • Proposed CPA exam changes offer options for CPA candidates
      • State franchise tax changes
      • How to build a simple and cohesive marketing plan that supports your firm’s strategic growth
      View All Expert Insights
    • Finance

      Our solutions for regulated financial departments and institutions help customers meet their obligations to external regulators. We specialize in unifying and optimizing processes to deliver a real-time and accurate view of your financial position.

      Finance Overview
      Solutions
      • CCH TagetikUnified performance management software
      • OneSumX for Finance, Risk and Regulatory ReportingIntegrated regulatory compliance and reporting solution suite
      • Lien SolutionsMarket leader in UCC filing, searches, and management
      • eOriginaleOriginal securely digitizes the lending process from the close to the secondary market
      View All Solutions
      Expert Insights
      • Improving the quality of your audit with data analytics
      • The future of Planning, Budgeting, Forecasting, and Reporting: FSN’s 2022 Global Survey
      • StateRAMP vs. FedRAMP: How these cybersecurity programs differ
      • Economic nexus: how it can affect your sales tax determination practices
      • The ultimate buyer's guide to FP&A software
      • What does RPA mean for internal audit and financial services?
      • 5 tips to build a risk-based audit plan for the public sector
      • Supply Chain Planning Software: the ultimate buyer's guide
      View All Expert Insights
    • Compliance

      Enabling organizations to ensure adherence with ever-changing regulatory obligations, manage risk, increase efficiency, and produce better business outcomes.

      Compliance Overview
      Solutions
      • OneSumX for Finance, Risk and Regulatory ReportingIntegrated regulatory compliance and reporting solution suite
      • TeamMateSolutions suite for auditors
      • EnablonSoftware solutions for risk & compliance, engineering & operations, and EHSQ & sustainability
      • CT CorporationRegistered agent & business license solutions
      View All Solutions
      Expert Insights
      • What are typical licensing requirements for new restaurants?
      • Individual Retirement Accounts: Mandatory amendment deadline moved back
      • CT Expert Insights: The pros and cons of forming a corporation, with Sandra Feldman
      • Reg Change and Bob Dylan: You don’t need a weatherman to know which way the wind blows
      • Using bowtie to answer the 3 questions
      • Improving the quality of your audit with data analytics
      • End-of-year checklist for law firms
      • End-of-year compliance checklist for corporations
      View All Expert Insights
    • Legal

      Serving legal professionals in law firms, General Counsel offices and corporate legal departments with data-driven decision-making tools. We streamline legal and regulatory research, analysis, and workflows to drive value to organizations, ensuring more transparent, just and safe societies.

      Legal Overview
      Solutions
      • Enterprise Legal ManagementMarket-leading legal spend and matter management, contract lifecycle management, and analytics solutions
      • Manual IPThe most comprehensive and detailed resource for IP professionals
      • LegiswayAll-in-one legal management software
      • BizFilingsIncorporation services for entrepreneurs
      View All Solutions
      Expert Insights
      • Case study: A leading financial services organization defines a legal technology roadmap that delivers efficiencies and savings with LegalVIEW BillAnalyzer and Passport
      • Legal Leaders Exchange: Giving law firms a roadmap for engagement
      • Conducting due diligence and document searches for international projects
      • How the four V’s can improve your legal ops
      • Compliance update: The 2022 amendments to Delaware’s business entity laws
      • Case study: PNC Bank sees quick cost savings and efficiencies with LegalVIEW® BillAnalyzer for better bill review
      • Infographic: Improving billing guideline compliance with AI
      • Report: LegalVIEW Insights volume 5 - Trends in vendor mix and total outside spend
      View All Expert Insights
    1. Back to Home >
    2. Back to Expert Insights >
    3. Somber Predictions from the IRS for the 2022 Tax Filing Seas...
    hands typing on a laptop, graphic overlay "Research and Learning Tax Trends"
    Tax & AccountingFebruary 17, 2022

    Somber Predictions from the IRS for the 2022 Tax Filing Season

    By: Mark Luscombe, JD, LLM, CPA

    It wasn't too long ago that things seemed to be looking up for the Internal Revenue Service (IRS). With Democrats in control of Congress and the Presidency, budgeting for the IRS appeared to be on the upswing after years of decline. The President’s tax proposals included raising revenue by giving the IRS an additional $80 billion to increase their enforcement activity. The IRS was looking to hire additional auditors.

    However, the IRS has announced an unusually gloomy prediction for the 2022 tax filing season.

    The IRS is publicly predicting enormous challenges in timely processing tax returns, issuing tax refunds, and responding to taxpayer inquiries. It has laid the blame on a combination of factors, including the pandemic, the years of budget cuts, and the requirement to devote time and resources to the economic impact payments and the advance child tax credit payments. 

    The IRS announced a fairly normal period for the tax filing season, starting on January 24, 2022, and ending on April 18, 2022; however, it said that it is starting the 2022 tax filing season with a much greater backlog from the 2021 tax filing season than is normal, with over six million unprocessed individual 2021 tax returns and two million amended tax returns at the end of 2021.

    The National Taxpayer Advocate stated that the IRS telephone service was worse than it had ever been in 2021, with an answer rate of only around 10 percent. The IRS has experienced a 25 percent decline in staff and a 20 percent decline in its budget as its workload has continued to increase. The workload has increased not only due to the growing U.S. population but also due to the COVID-related payments that the IRS was tasked with distributing.

    Tax practitioners have experienced these problems over the past two filing seasons. The IRS had continued to send out computer-generated notices complaining about the lack of taxpayer responses, while truckloads of IRS mail sat unopened at IRS facilities as IRS personnel were forced to work from home. Even special phone lines for tax practitioners experienced the same problems as phone lines for taxpayers.

    The House has proposed a 14% increase in the IRS budget for the current fiscal year, but that budget has not yet passed the Senate as of this writing. The proposed additional $80 billion for the IRS to beef up enforcement and help reduce the tax gap was left out of the infrastructure legislation due to Republican opposition. It is included in the version of the Build Back Better bill that has passed the House, but the future of that bill in the Senate remains cloudy.

    While the IRS is encouraging taxpayers to file returns as early as possible and to file electronically, still about 10% of tax returns are filed on paper (sometimes due to prohibitions on filing certain statements and forms online), which require an inordinate amount of time to process.

    The IRS has tried during the pandemic to ease some requirements for in-person contact by permitting more e-signatures and relaxing notarization requirements, but that also comes with the risk of expanded fraud and identity theft.

    IRS History

    The current IRS can trace its history back to the Civil War when the position of Commissioner of Internal Revenue was created and an income tax was enacted to help fund the war effort. The Commissioner’s role stayed on even as that income tax was allowed to expire. The Commissioner eventually became head of the Bureau of Internal Revenue, created in 1913 following ratification of the 16th Amendment to the Constitution and enactment of the federal income tax that remains with us to this day.

    The Bureau of Internal Revenue experienced its own early woes as the population subject to income taxation was greatly expanded first during World War I, then again during the Great Depression, and then again during World War II. The Commissioner of Internal Revenue was also tasked with enforcing the first 11 years of prohibition starting in 1918. The early 1950s brought reports of abuses by the Bureau of Internal Revenue personnel, a restructuring of the tax code in 1954, and an official renaming as the Internal Revenue Service.

    The IRS’s current problems can probably be traced to reports of abusive practices by IRS agents in the 1980s and 1990s, which resulted in the IRS Reform and Restructuring Act of 1998. The legislation was designed to improve IRS’s customer service and enforcement; however, audit activity underwent a steady decline thereafter, due less to the legislation itself than to Congress continuing to punish the IRS with budget cuts.

    All during this period, the population of the United States continued to grow and the tax code continued to become more complicated, as provisions were added not only to raise or lower revenues but also to achieve a variety of social goals, including help for families, education, health, retirement, the poor, charities, etc. The growth of refundable tax credits coupled with wage withholding that started in World War II resulted in many taxpayers receiving refunds from the IRS at the tax return time rather than owing money.

    In 2014, the IRS Commissioner expressed concern in an email to IRS employees about the IRS’s ability to handle the duties assigned to it under the Affordable Care Act. Those concerns were not initially addressed to the public but were eventually leaked to the public.

    The Current Situation

    The IRS currently is understaffed to achieve the tasks assigned to it and too underfunded to modernize with the technology needed to accomplish those tasks with a reduced staff. While it is well documented that a dollar spent on funding the IRS creates a return of as much as six-fold to the government with increased collections, that increased funding has not yet been enacted.

    In the past years, the IRS seemed to try to hide its imperfections with reports on how well the tax season was going in spite of a severe shortage in staff and funding. Now, however, the IRS seems more willing to lay its cards on the table and state that the 2022 tax season could be a disaster before it even starts.

    From the perspective of the tax return preparer, however, the 2022 tax filing season may be no worse than the past two.

    Currently, there is no extended tax filing season; COVID is becoming something that tax professionals are getting accustomed to dealing with; the number of tax changes for 2021 that tax return preparers need to deal with are probably not any larger than the typical tax law changes in each of the recent years, and the concerns that the IRS is expressing about the current filing season are similar to the concerns that tax professionals have already experienced for the last two tax filing seasons.

    There is little reason to hope that things will get better right away. Even a big increase in IRS funding if Build Back Better were enacted in 2022 would only have a weak ability to provide immediate results, though it might improve morale at the IRS immediately.

    Mark Luscombe
    Mark Luscombe, JD, LLM, CPA
    Principal Federal Tax Analyst
    Mark Luscombe, a CPA and attorney, is the principal federal tax analyst for Wolters Kluwer Tax & Accounting. He is the current chair of the Important Developments Subcommittee of the Partnership Committee of the American Bar Association Tax Section and speaks on a wide range of tax topics. He authors monthly columns in Accounting Today and TAXES magazine. Prior to joining Wolters Kluwer, he was in private practice with several Chicago-area law firms where he specialized in taxation.
    Explore related topics
    Expert insightsTax
    Research & Learning

    CCH® AnswerConnect gives you the industry’s most powerful web-based technology, combined with comprehensive and authoritative tax research content.

     

    Learn More
    More from CCH AnswerConnect
    Get complimentary access
    Customer login
    Latest federal tax news

    Related insights

    Economic nexus: how it can affect your sales tax determination practices
    Economic nexus: how it can affect your sales tax determination practices 3 steps to developing a successful advisory services model for your accounting firm What are APIs, and why are they important to accountants and CPA firms?

    Related Insights

    • Individual Retirement Accounts: Mandatory amendment deadline moved back
      Article
      Compliance
      Tax & Accounting
      August 19, 2022
      Individual Retirement Accounts: Mandatory amendment deadline moved back
      Recently released by the IRS, Notice 2022-33 indicates the deadline to amend existing IRA plans as the result of rule changes by the SECURE Act has been extended to “… December 31, 2025, or such later date as the Secretary prescribes in guidance.”
      Learn More
    • Improving the quality of your audit with data analytics
      Article
      Compliance
      Finance
      Tax & Accounting
      August 18, 2022
      Improving the quality of your audit with data analytics
      Curious about the benefits of data analytics in audit? Add value to your organization by embedding data analytics into your audit testing.
      Learn More
    • Form 990-N filers must use a new sign-in process to file their annual reports
      Article
      Tax & Accounting
      August 18, 2022
      Form 990-N filers must use a new sign-in process to file their annual reports
      Smaller charities that are eligible and choose to file Form 990-N must sign in to the IRS modernized authentication platform.
      Learn More
    • Tax pros can help extended filer clients by reviewing available tax benefits
      Article
      Tax & Accounting
      August 18, 2022
      Tax pros can help extended filer clients by reviewing available tax benefits
      Tax professionals can save their taxpayer clients by referencing this list of important tax credits and deductions for 2023.
      Learn More
    Footer Navigation
    • About Wolters Kluwer
    • Strategy
    • Our Organization
    • Management
    • Supervisory Board
    • Value Creation
    • News & Press Releases
    • Events
    • Solutions Directory
    • Health
    • Tax & Accounting
    • Finance
    • Compliance
    • Legal
    • Expert Insights
    • Careers
    • Investors
    • Sitemap
    • Site Owner
    Follow Wolters Kluwer US
    • Facebook
    • Twitter
    • LinkedIn
    • Instagram
    • YouTube
    Wolters Kluwer Logo

    When you have to be right

    • Terms of Use
    • Privacy & Cookies

    © 2022 Wolters Kluwer N.V. and/or its subsidiaries. All rights reserved.

    Back To Top