Talking With the Taxpayer Advocate: The IRS Is Under Stress
The pandemic and new stimulus-driven responsibilities are straining IRS resources.
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Newsletter sign up Newsletter

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 The IRS’s outdated information technology, along with reduced funding, has taken a toll on its ability to provide quality service to taxpayers.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.
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.
-
-
As Fed Raises Rates 0.25%, Savings Rates Set to Rise, Too
Some experts say now would be a good time to lock in a much better savings rate on your accounts.
By Erin Bendig • Published
-
Medical Tourism Can Get You Healthcare Bargains Abroad
Millions of Americans partake in medical tourism each year. If you can’t afford a medical procedure in the U.S., consider investigating options overseas.
By Emma Patch • Published
-
Biden Wants a Higher Child Tax Credit and So Do Some Republicans
President Biden wants to revive the higher child tax credit and monthly advance payments, while some Republican senators have their own ideas for the popular tax break.
By Joy Taylor • Published
-
2023 Standard Deduction Amounts Are Now Available
The IRS has released the 2023 standard deduction amounts. In addition to saving you money, the standard deduction can also tell you if you even have to file a return.
By Rocky Mengle • Published
-
IRS Confirms Tax Fate of California Middle Class Refunds
Millions of Californians worried about paying tax on middle class tax refunds have an answer along with other tax deadline relief.
By Kelley R. Taylor • Last updated
-
Will You Pay Taxes on Your State Stimulus Check?
Millions of people who received state "stimulus" payments in 2022, have wondered whether the money will be taxed.
By Kelley R. Taylor • Last updated
-
Is Your Favorite SUV Now Eligible For the EV Tax Credit?
The SUV that you thought wasn't eligible for the EV tax credit last week, might now qualify.
By Kelley R. Taylor • Published
-
The Many Definitions of Modified Adjusted Gross Income (MAGI)
The definition of modified adjusted gross income differs depending on what the calculation is used for.
By Joy Taylor • Published
-
Does the IRS Audit Some Taxpayers More Than Others?
A study of IRS audits, from Stanford University researchers and the U.S. Treasury Department, looked at whether some taxpayers are audited more than others.
By Kelley R. Taylor • Published
-
Can the Earned Income Tax Credit Help You?
The earned income tax credit (EITC) can help people with low-to-moderate income but it can also increase IRS audit risk.
By Kelley R. Taylor • Last updated