March 4, 2021
The Honorable Janet Yellen
Secretary
U.S. Department of the Treasury
Washington, DC 20220
The Honorable Patrick Leahy
Chair
Committee on Appropriations
U.S. Senate
Washington, DC 20510
The Honorable Rosa L. Delauro Chair
Committee on Appropriations
U.S. House of Representatives
Washington, DC 20515
The Honorable Richard Shelby
Vice Chair
Committee on Appropriations
U.S Senate
Washington, DC 20510
The Honorable Kay Granger
Ranking
Committee on Appropriations
U.S. House of Representatives
Washington, DC 20515
Dear Madame or Sir:
As the Biden Administration and Congress begin the development of the FY 2022 federal budget, the National Association of Enrolled Agents (NAEA) urges policymakers at every level to consider significant long-term strategic investments in the Internal Revenue Service (IRS) as well as creating a one-time COVID-19 recovery fund. NAEA represents the interests of approximately 57,000 enrolled agents – tax experts licensed by the Department of the Treasury to represent taxpayers before the IRS – and through them their taxpayer clients. Our members are frontline observers of the state of the tax administration system and overwhelmingly they are telling us that the system is near the breaking point. Unfortunately, after two years of paralyzing shutdowns (the 2019 budget impasse and the 2020 COVID-19 pandemic) on top of a decade of constantly shrinking budgets, by every measure of basic customer service, key elements of the agency are simply not functioning for taxpayers and their representatives.
NAEA believes the IRS needs a large one-time infusion of appropriated funds to process outstanding paper forms and payments. This backlog is harming taxpayers and the IRS alike. Unprocessed tax forms and payments are resulting in unwarranted automated notices being sent to taxpayers. Taxpayers and their duly authorized representatives are only able to contact the proper IRS personnel with great difficulty because of long delays in processing power of attorney forms and long wait times on phone lines. Unfortunately, once they can get through to the IRS, the data in taxpayer accounts often do not reflect the correct tax situation and IRS personnel seem powerless to fix the situation. This problem often results in taxpayers continuing to move down the payment and collection pipeline at the agency, further increasing the costs for both taxpayers and IRS to remedy these unwarranted and serious account snafus.
The inability to break this bureaucratic logjam is affecting everything from student loans to small business credit. Enrolled agents are increasingly concerned that the problems associated with this backlog are going to affect the 2021 filing season and filing seasons beyond. Policymakers need to acknowledge and solve this problem as quickly as possible by establishing a dedicated COVID-19 recovery fund. These funds would be dedicated only to processing the gigantic mound of paper built up from two years of debilitating crises.
While a dedicated COVID-19 recovery fund would go a long way toward fixing the current problem, the IRS needs consistent strategic increases in its funding over the next decade to forestall future crises. These funds would return this essential agency, which touches almost all our citizens, to levels of customer service and compliance it has not experienced in over a decade. Additionally, the agency needs to invest in both policies and technologies that will eliminate 100 percent of the need to rely on paper transactions in filing, payment and in so-called correspondence audits. Where necessary, Congress should move forward with requirements supporting 100 percent paperless transactions.
NAEA and its members stand ready to assist policymakers in improving the tax administration system. We strongly believe that without a substantial influx of resources in this fiscal year, it could make or break the agency for decades to come.
Sincerely,
Donald Rosenberg, EA President
CC: The Honorable Mike Quigley
The Honorable Steve Womack
The Honorable Chris Van Hollen
The Honorable Cindy Hyde-Smith
The Honorable Richard Neal
The Honorable Kevin Brady