Don't Mess With Taxes

Image: IRS "A Closer Look"

In looking back at 2020, the Internal Revenue Service thinks it did a pretty good job, all things considered.

That's the assessment from IRS Commissioner Chuck Rettig as his agency released its annual progress report, Internal Revenue Service Progress Update/Fiscal Year 2020 – Putting Taxpayers First.

"The COVID-19 pandemic presented some of the greatest challenges to the IRS in its history, both in terms of being able to carry out our mission and in protecting the health and safety of taxpayers and our own workforce," wrote Rettig wrote in the report's opening message. "IRS employees responded admirably by quickly facilitating financial assistance to millions of deserving and needy Americans."

"Even with all the challenges, we believe we have made great strides during Fiscal Year 2020, but we want to do more," Rettig said.

The report highlights what the agency accomplished in connection the IRS' six strategic goals:

1. Empower and enable all taxpayers to meet their tax obligations.
2. Protect the integrity of the tax system by encouraging compliance through administering and enforcing the tax code.
3. Collaborate with external partners proactively to improve tax administration.
4. Cultivate a well-equipped, diverse, flexible and engaged workforce.
5. Advance data access, usability and analytics to inform decision-making and improve operational outcomes.
6. Drive increased agility, efficiency, effectiveness and security in IRS operations.

It also identifies ongoing modernization efforts and discusses progress made in implementing the Taxpayer First Act, the major IRS reform law enacted in mid-2019.

Coping with the coronavirus: In line with the Taxpayer First Act's name, meeting the first strategic goal requires, per the report, "improving the taxpayer experience so that taxpayers and their representatives can understand and meet their tax obligations with minimal burden."

To do that, the IRS updated tax information and forms in connection with year-end tax legislation, as well as further refined forms that had dramatically changed under the Tax Cuts and Jobs Act (TCJA).

Then, as Rettig noted, COVID-19 arrived. During the last half of fiscal year 2020, the IRS, like much of the country's public and private entities, halted or greatly reduced much of its operations.

Even so, during the extended 2020 tax filing season — the adjusted July 15 due date making it the longest ever on record — the IRS processed more than 145 million individual tax returns and issued more than 100 million refunds totaling more than $276 billion. It also processed 45.6 million business returns.

Ongoing goals: I'll let you thumb through the full 44-page report, which earns this weekend's Saturday Shout Out. (As I mentioned last weekend, since we're still early in 2021 and I'm still getting over my New Year's hangover, if you want more recommended weekend reading beyond the ol' blog you can check out 2020's Shout Outs.)

In addition to the items touched on this post, you'll find discussions of how the IRS last year handled emerging tax matters, such as virtual currency, the gig economy and the growing marijuana industry.

Spoiler alert: The agency's focus in these areas is how to educate taxpayers making money in these areas on the requirement to report that income to Uncle Sam.

Other longstanding issues also remain on IRS radar. These include ways to fight tax identity theft and return fraud and modernizing agency operations, including expanding electronic options for taxpayers.

"As we move into the future, the name of the game for the IRS will continue to be innovation, creativity and service to the people of our country to make their world better," Rettig said. "Given all we've accomplished together in 2020 and all we're working to achieve, we believe the future looks bright for the IRS, the tax system and our nation."

You also might find these items of interest:

• Stop tax ID theft by applying for special IRS ID number
• IRS' law enforcement unit successes: COVID crimes, traditional tax investigations
• In the wake of disasters & COVID-19, will the IRS be ready for the 2021 tax season?

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