Talking With the Taxpayer Advocate: The IRS Is Under Stress
The pandemic and new stimulus-driven responsibilities are straining IRS resources.


Erin Collins is the IRS national taxpayer advocate. Before joining the IRS in March 2020, she was managing director of KPMG’s tax controversy practice for the western region.
How has the pandemic affected the ability of the IRS to provide service to taxpayers? Social distancing requirements limited IRS operations that require employees to work in close quarters, and that created several categories of work backlogs. The IRS closed a number of its campuses, so it was parking paper tax returns and correspondence in trailers for a while. Now, my understanding is that they’ve gone through all of that correspondence, and it’s been entered into IRS systems but not yet worked. At the end of January, there were still 6.7 million individual 1040 paper tax returns that had not been processed. If those returns involved a refund, it hadn’t been paid. Taxpayers who file their 2020 tax returns on paper will face similar problems, so I urge taxpayers to file electronically to avoid delays.
The IRS has been tasked with distributing stimulus checks and will also be responsible for administering the expanded child tax credits in the recently enacted stimulus bill. Is the IRS being asked to do too much? The IRS was created as a tax administrator, and in recent decades, it has been asked to administer a number of social programs. The challenge is: Does it have the information technology and infrastructure to be further stretched beyond its traditional tax-collection mission without breaking? The IRS’s outdated information technology, along with reduced funding, has taken a toll on its ability to provide quality service to taxpayers. It will have to be fixed by increasing funding for modernization and infrastructure and staffing. If the U.S. can land a rover on Mars and send pictures back to earth, we should be able to provide a fully functional, fair tax administration system that provides quality service on a daily basis.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What should taxpayers do if they can’t afford their tax bill? They should file their tax return and work with the IRS on the payment portion. If taxpayers don’t file on time, they face a penalty of 5% of the amount due per month, for up to 25% of the tax due. The failure-to-pay penalty is substantially less—just 0.5% of the amount due each month. The IRS has been very flexible with taxpayers, especially during the pandemic.
Do you support requiring all tax preparers to meet minimum competency requirements? Absolutely. Taxpayers and the tax system depend heavily on the ability of preparers to prepare accurate tax returns. Over the years, numerous studies have found that noncredentialed preparers routinely prepare inaccurate returns, and some engage in fraud. I believe taxpayers and the tax system would benefit from weeding out incompetent preparers and bad apples.
As the pandemic winds down, what are your priorities for the IRS? I would love to see a robust online account so taxpayers can access their tax returns and transcripts electronically and use e-mail to communicate with the IRS. I realize the IRS has security and privacy concerns and we want to prevent fraud, but so do banks and they’ve been able to make it work for more than two decades. If taxpayers can electronically communicate with the IRS, that would open up the phone lines for people who don’t have the ability to communicate electronically or don’t have broadband. A win-win all around.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.
-
I’m 62 and worried about Social Security’s future. Should I take it early?
A Social Security shortfall may be coming soon. We ask financial experts for guidance.
-
My First $1 Million: Retired Tech Industry Director, 78, Delaware County, Ohio
Ever wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Ask the Editor, July 17: Tax Questions on the New Tax Law
Ask the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the new tax law.
-
Ask the Editor, July 4: Tax Questions on Inherited IRAs
Ask the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the rules on inheriting IRAs.
-
IRS Watchdog: Three Problems the IRS Must Address in 2025
IRS The tax season is over, but new changes to the IRS can pose risks to your taxpayer experience.
-
Elon Musk and Most Taxpayers Don't Like What's in Trump's 'Big Beautiful Bill'
Tax Policy President Trump is betting big on his newest tax cuts, signed into law on July 4. But not everyone is on board.
-
Ask the Editor, June 27: Tax Questions on Disaster Losses, IRAs
Ask the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on paper checks, hurricane losses, IRAs and timeshares.
-
2025 SALT Cap Could Hurt Top 'Hidden Home Cost'
Tax Deductions The GOP tax bill could make hidden homeowner costs worse for you. Here’s how.
-
No Social Security Tax Changes in Trump’s 'Big Bill'? What Retirees Need to Know
Tax Policy Eliminating taxes on Social Security benefits is missing from President Trump’s tax overhaul. Here’s why and what an alternative offering could mean for retirement taxes.
-
Ask the Editor, June 20: Questions on Tax Deductions and IRAs
Ask the Editor In our latest Ask the Editor round-up, Joy Taylor, The Kiplinger Tax Letter Editor, answers four questions on deductions, tax proposals and IRAs.