INDIANAPOLIS— The official tax season does not begin until late January, but taxpayers can start filing online returns starting today.
The Internal Revenue Service announced the IRS Free File Guided Tax Software will be available on January 10 and will accept individual tax returns.
Taxpayers with an income of $84,000 or less in 2024 are eligible to use the free software.
The National Taxpayer Advocate, an independent organization within the IRS that reports to Congress, issued a report this week that highlighted a slew of ongoing problems at the Internal Revenue Service.
Among the top problems at the IRS, according to the National Taxpayer Advocate:
- Delays in processing Employee Retention Credit claims. As of Oct. 26, 2024, the IRS faced a backlog of about 1.2 million ERC claims, with many claims pending for more than a year. The processing time is harming many eligible businesses that are relying on these funds to pay expenses, according to the report.
- Delays in resolving identity theft cases. The average time it took the IRS to resolve identity theft cases and issue refunds to the affected victims was almost two years (for cases closed by the IRS’s Identity Theft Victim Assistance (IDTVA) unit in Fiscal Year 2024). These delays impacted nearly half a million taxpayers and were even worse than the delays seen in FY 2023, when cases took almost 19 months to resolve, according to the report.
- Continuing delays in IRS return processing are frustrating taxpayers and causing refund delays. The IRS receives more than 10 million paper-filed Forms 1040 each year and more than 75 million paper-filed returns and forms overall. Until recently, IRS employees had to manually transcribe the data from those returns into IRS systems. While the IRS has made strides toward automating return processing by scanning more than half of paper-filed returns and forms, it still has a long way to go to digitize all paper, according to the report.
- Taxpayer service is often not timely or adequate. According to the report, while taxpayer service improved across the IRS’s three main channels – telephone, in-person and online – significant service gaps remain. Overall, the “Level of Service” for all toll-free lines in FY 2024 was just 56%, with only 31% of callers reaching an assistor.
- Continuing challenges in employee recruitment, hiring, training and retention. The IRS faces ongoing difficulties in hiring, training, and maintaining employees. The agency often takes several months to hire new employees, leading some candidates to accept other offers, according to the report.
The National Taxpayer Advocate issued dozens of recommendations including requiring the IRS to timely process claims for refund or credit, something that is not currently required. The advocate also recommends adequate funding and technology upgrades, establishing competency standards for federal tax return preparers, and expanding the U.S. Tax Court’s jurisdiction to hear refund cases.
National Taxpayer Advocate Erin M. Collins noted the IRS has made significant improvements since 2020.
“For the first time since I became the National Taxpayer Advocate in 2020, I can begin this report with good news: The taxpayer experience has noticeably improved,” Collins said. “In 2024, taxpayers and practitioners experienced better service, generally received timely refunds, and faced shorter wait times to reach customer service representatives…. After receiving multiyear funding, the IRS has [also] made major strides toward improving its taxpayer services and information technology (IT) systems.”
Employers are required to provide you with a W-2 by January 31.
Tips for Filing Your Taxes
- Make sure you have all your documents before you file (W2s, 1099s, etc.)
- Otherwise, you may have to amend your tax return
- Use software like Free File to file electronically
- Use a free tax preparation site if you qualify
- Ask for direct deposit rather than a paper check
You can contact the Local Taxpayer Advocate in Indiana at 317-685-7840 or click here.
“The IRS remains committed to its partnership with Free File Inc. to ensure taxpayers have free and secure options for filing their taxes electronically,” said IRS Commissioner Danny Werfel. “Taxpayers have multiple filing choices, including trusted tax professionals, tax software, Free File, Direct File or free preparation services through IRS partners. Over the years, Free File has helped millions of taxpayers, providing a fast and simple way to file their returns. This program continues to be a valuable resource for eligible individuals looking to file their taxes for free through this unique program.”\
Are you having trouble with your taxes or getting your refund? Contact WRTV Investigates Kara Kenney at kara.kenney@wrtv.com.
