On January 10, 2024, National Taxpayer Advocate Erin M. Collins released her 2023 Annual Report to Congress. Created in 1996, the Taxpayer Advocate Service (TAS), an independent arm of the IRS, is required to submit a report detailing the most significant problems taxpayers are experiencing with the Internal Revenue Service (IRS) and make recommendations on how to address and resolve them.

“Overall, the magnitude of successes exceeded the areas of weakness in 2023, and most metrics showed significant improvement from the depths of the [COVID-19] pandemic,” Collins wrote in the report’s preface. The report confirms the IRS’ progress to improve taxpayer services and plans to transform the taxpayer experience. It notes improvements on Form 1040 processing and telephone service, eliminating most of its processing backlog and paying refunds in a timely manner. “The good news is that, with limited exceptions, we are back to business as usual,” Collins wrote. Collins noted major strides the IRS has taken as a result of funding via the Inflation Reduction Act and the planning that went into the Strategic Operation Plan and expressed optimism overall.

As required by law, the report also cites the biggest challenges facing IRS. Paper processing continues to be identified as a weakness. The 2023 report identified the following challenges within the IRS: Extraordinary delays in assisting victims of identity theft; Delays in processing amended tax returns and taxpayer correspondence; Challenges in receiving telephone assistance despite overall improvements; and, Employee Retention Credit processing. Administrative recommendations include prioritizing the improvement of online accounts, improving the IRS’s ability to attract, hire and retain employees, ensuring all IRS employees are well-trained, and enabling all taxpayers to e-file their tax returns, among others.

IRS Commissioner Danny Werfel responded to the report saying the taxpayer advocate “raises a number of very important areas that we are looking at to make improvements,” through the use of funds made available by the Inflation Reduction Act. “Many of these issues identified in her report ultimately depend on adequate IRS resources,” Werfel continued. “This is another reason why the Inflation Reduction Act funding and our annual appropriations are so critical to making transformational changes to the IRS to help taxpayers and the nation.”

To access the full 238 page report, click here.