Following Pascrell Call, IRS Halts Tax Processing Center Closing

Letter this morning from Pascrell, Menendez, Doggett, and members pushed against misguided move that would have worsened return delays and dysfunction

WASHINGTON, DC – Following demands for action, the Internal Revenue Service (IRS) has just announced it will no longer shutter its Austin, Texas processing center. Earlier today, U.S. Reps. Bill Pascrell, Jr. (D-NJ-09) and Lloyd Doggett (D-TX-35), members of the tax-writing House Ways and Means Committee, and U.S. Sen. Bob Menendez (D-NJ) led a bicameral group of colleagues urging the Internal Revenue Service (IRS) to halt plans to close the Austin processing center as the agency faces growing delays in the processing of unprocessed tax returns and Individual Taxpayer Identification Number (ITIN) applications.

“I am gratified that the IRS acted expeditiously to our calls and is no longer closing the processing facility in Austin,” said Rep. Pascrell, the Chairman of the House Ways and Means Subcommittee on Oversight. “The IRS is already racked by delays and this closure would have added further dysfunction and chaos for millions of taxpayers. Tax-filing season is already nerve-racking enough and the IRS must do all it can to make the process better. This is a helpful start.”

“We ask that the IRS go further than a ‘strategic pause’ that was announced on June 14, 2021, and announce that it is no longer considering closing the Austin Tax Processing Center until the current processing issues are addressed,” the members wrote to IRS Commissioner Charles Rettig this morning. “We are also concerned that closing the Austin Tax Processing Center will further delay the processing of applications for ITINs, as this facility is the only facility that processes ITIN applications.”

According to a report issued by the Treasury Inspector General for Tax Administration’s (TIGTA) earlier this year, the processing times for ITIN applications have doubled over the past two years, after all ITIN processing was closed from March 25, 2020 to June 1, 2020 in the early days of the pandemic. This has led to increased wait times for applicants applying for an ITIN to pay their taxes or receive the Child Tax Credit (CTC) or advanced CTC.

“Frontline IRS employees represented by NTEU, now working on the third tax filing season of the pandemic, fully support the recommendation from Sen. Menendez, Sen. Cortez Masto, Rep. Pascrell, Rep. Doggett, and their colleagues that the IRS not shut down the Austin Tax Processing Center,” said Tony Reardon, National President of the National Treasury Employees. “This is a practical step the IRS can take immediately to make sure skilled employees in Austin stay on the job and continue working on the agency’s backlog. As the lawmakers noted, the IRS needs additional long-term investments in funding and staffing to rebuild from a decade of deep cuts, and it needs to hold onto the employees it already has in Austin as the IRS works to improve services to taxpayers.”

As Chairman of the Subcommittee on Oversight, Rep. Pascrell has been focused on fixing the IRS. On October 26, 2021, Pascrell demanded answers from Commissioner Rettig on systemic mail delays impacting IRS operations, tax filings, and refunds. Pascrell raised alarms on the slow start to the 2021 tax-filing season, and with Chairman Richard Neal (D-MA-01) castigated the IRS’s continually sending out erroneous notices to taxpayers.

Today’s letter to IRS leadership was signed by Reps. Pascrell, Doggett, Chuy Garcia (D-IL-04), Lucille Roybal Allard (D-CA-40), Judy Chu (D-CA-27), Jimmy Gomez (D-CA-34), Barbara Lee (D-CA-13), Alan Lowenthal (D-CA-47), and Josh Gottheimer (D-NJ-05), and Sens. Menendez, Catherine Cortez Masto (D-NV), Martin Heinrich (D-NM), Patrick Leahy (D-VT), Mark Warner (D-VA), and Ron Wyden (D-OR).

The text of the members’ letter is provided below.

Dear Commissioner Rettig,

We are concerned to learn that the Internal Revenue Service (IRS) is still considering closing its Austin Tax Processing Center, despite the immense backlog in unprocessed tax returns and Individual Taxpayer Identification Number (ITIN) applications, continued customer service issues, and staffing challenges facing the IRS. Accordingly, we write to echo the Treasury Inspector General for Tax Administration’s (TIGTA) recommendation that the IRS postpone the closure of this facility until hiring challenges and processing backlogs are adequately addressed.^[1]

As you are aware, the closure of the Austin facility is part of a long-standing plan to consolidate paper return processing at the agency and decrease costs. While we understand that these consolidation efforts are guided by the declining trend in the number of paper returns and a cost savings of $94 million, we believe that these efforts no longer make sense—especially given the extensive paper backlog and hiring challenges that have plagued the IRS for the last two filing seasons. We ask that the IRS go further than a “strategic pause” that was announced on June 14, 2021, and announce that it is no longer considering closing the Austin Tax Processing Center until the current processing issues are addressed, as TIGTA has recommended.

We are also concerned that closing the Austin Tax Processing Center will further delay the processing of applications for ITINs, as this facility is the only facility that processes ITIN applications. According to a TIGTA report released earlier this year, the processing times for ITIN applications have doubled over the past two years, due to the fact that all ITIN processing was closed due to the COVID-19 pandemic from March 25, 2020 to June 1, 2020.^[2] This has led to increased wait times for applicants applying for an ITIN to pay their taxes and/or receive the Child Tax Credit (CTC) or advanced CTC.^[3] Accordingly, given the increased wait times for these applications, we ask that the IRS halt its plans to close the Austin Tax Processing Center, in order to reduce the application wait-times for these applicants.

Thank you for your attention to this matter. We look forward to your response.

Sincerely,

[1] Treasury Inspect. Gen. of Tax Admin. (TIGTA), Plans to Close the Austin Processing Center Should be Halted Until Hiring Challenges and Backlogs at Remaining Centers are Addressed, 2022-40-15 (Feb. 7, 2022), https://www.treasury.gov/tigta/auditreports/2022reports/202240015fr.pdf.

[2] TIGTA, Administration of the Individual Taxpayer Identification Number Program, 2022-40-013 (Jan. 26, 2022), https://www.treasury.gov/tigta/auditreports/2022reports/202240013fr.pdf.

[3] See Kyle Swenson, Immigrant Families Struggle to Access Child Tax Credit Payments, Wash. Post (Oct. 23, 2021), https://www.washingtonpost.com/dc-md-va/2021/10/23/immigrant-families-struggle-access-child-tax-credit-payments/.