On Tuesday, April 13, 2021, the U.S. Senate Finance Committee hearing, the 2021 Filing Season and 21st Century IRS called IRS Commissioner Charles Rettig to testify on the 2021 tax filing season. His comments included positive news on the Child Tax Credit. (CTC)
Chairman Ron Wyden’s (D-OR) opening statement emphasized that 2021 is not a typical year and that the economy has changed and expanded, pointing out the creation of cryptocurrencies like bitcoin. The IRS he stated “needs more highly-skilled investigators and better technology” and that the President’s budget proposal of a 10% increase in IRS funding is overdue. Chairman Wyden shared his appreciation for the IRS staff for “working long hours during this pandemic to get three rounds of relief payments to …millions of hurting families.” He wanted the Commissioner to share how the new Child Tax Credit (CTC) payments were progressing.
Ranking Member Senator Mike Crapo (R-ID) also acknowledged the unprecedented challenges this past year and the IRS. He focused on how the role of the IRS as “our nation’s tax collector” has been expanded by Congress to include the delivery of “three rounds of over 150 million Economic Impact Payments (EIP), implementing a variety of temporary tax incentives to keep employees on payroll, guarantee paid leave for employees who contract COVID-19, and now distribution of millions of advance payments of the Child Tax Credit.” He wanted the Commissioner to address the concerns of the backlog of 2020 tax returns, the millions of taxpayers who have received confusing notices, and plans for the implementation of the “aggressive” July 1 Child Tax Credit advance payment program.
Commissioner Charles Rettig reported that the IRS is in the 2021 filing season and has received more than 93.2 million individual federal tax returns and issued more than 62.3 million refunds in the amount of $180.2 billion. In addition, within days of the passage of the American Rescue Plan Act, the IRS began the delivery of the third round of EIP to millions of Americans. As far as the progress of the Child Tax Credit, Commissioner Rettig stated that the IRS is coordinating with the Treasury Department to quickly and efficiently deliver the program.
Senators Sherrod Brown (D-OH) and Bob Casey (D-PA) both inquired about the IRS implementation with the Child Tax Credit. Senator Brown asked, “is the IRS on track for monthly payments for July?” and Commissioner Rettig stated YES. The IRS was provided $3.1 billion additional funding and an increase of 3.6 percent in the FY2021 funding, however, Commissioner Rettig stated that the IRS needs investments in the agency budget. Funds appropriated in the American Rescue Plan can be used to support VITA that has a 94 percent accuracy rate for Earned Income Tax Credit (EITC), stated Rettig.
Both Democrats and Republicans questioned Rettig on service delays, tax collections, and stimulus checks such as lengthy phone delays taxpayers experience when calling the IRS with questions. Rettig said, “call volumes have doubled over the past year and reached a peak of 1,500 calls per second at one point. “He reported that IRS staff are working overtime, including the weekend, to process millions of tax returns and that the mail backlog is normal amounts that the agency receives. He informed Senator James Lankford (R-OK) that the IRS is current on mail.
Senator Ben Cardin (D-MD) inquired about the hard time individuals have accessing stimulus payments. The Commissioner shared how the IRS is partnering with 11,000 partners and VITA sites to reach underserved communities. Not unprecedented to the pandemic are natural disasters stated Senator Bill Cassidy (R-LA) and that Louisiana is known for having many hurricanes where the IRS provides disaster tax relief; he went on to inquire about outreach to lower-income families eligible for the Earned Income Tax Credit and any updates for prioritizing them especially in light of natural disasters. Rettig stated that the agency would support every proposal regarding funding because the IRS has been underresourced for decades and serves more people than any other agency or organization.