Rettig Says IRS On Track To Begin 2021 Tax Season On Time

IRS Commissioner Chuck Rettig said Thursday that he was cautiously optimistic the 2021 tax filing season will commence at its usual time in January, but it's possible the pandemic or the government's funding situation will affect the agency's schedule. 

Although a government funding lapse or an escalation in the novel coronavirus' spread could delay the season's start, the agency is on track to begin accepting returns toward the end of January, said Rettig, speaking at a webinar hosted by the Bank & Capital Markets Tax Institute. The Internal Revenue Service is currently funded under a continuing resolution set to expire Dec. 11. 

"We are what we refer to as cautiously optimistic, which is the highest level of optimism you'll ever get from a totally risk-averse agency," he said.

The IRS began conducting systems checks in August instead of September this year so the agency would be better prepared if there were another spike in the coronavirus, Rettig said. 

The pandemic has altered how the IRS conducts its operations, Rettig said, but the agency is now substantially more capable of allowing its employees to work remotely. Some 85% of its workforce are now telework-ready, he said. 

The IRS has made strides in decreasing its remaining mail backlog, which piled up when the agency closed mail processing centers in response to the pandemic. The backlog once numbered 12.3 million of unopened items, Rettig testified to the Senate in June.

"We are now down to below 3 million pieces of mail physically unopened, of which less than a million are tax returns," he said. 

The agency is also still preparing its approximately 200-page report to Congress regarding its implementation of the Taxpayer First Act , Rettig said. While the IRS will likely be able to deliver it during December, he said the report may be delayed until January. 

The act, signed into law in July 2019, made a host of administrative changes to the IRS to improve customer service and technology and overhaul the agency's appeals process. It prevents the IRS from hiring private debt collectors to pursue tax obligations from individuals whose adjusted gross income doesn't exceed 200% of the applicable poverty level.

The act required the IRS to provide its comprehensive taxpayer service strategy plan to Congress earlier this summer, but lawmakers extended the deadline until Dec. 31 in response to the pandemic. 

--Editing by Neil Cohen.

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