Gottheimer Sounds Alarm on Massive Tax Return Backlog, Announces New “Taxpayer Action Plan” to Cut Through IRS Red Tape

Announces $1.2 Million in Delayed Federal Tax Refunds Clawed Back to North Jersey Residents

PARAMUS, NJ — Today, February 28, 2022, Congressman Josh Gottheimer (NJ-5) spoke at the IRS Taxpayer Assistance Center in Paramus to sound the alarm on the massive backlog of tax returns keeping dollars out of the pockets of hardworking families in North Jersey and nationwide. Gottheimer announced his Taxpayer Action Plan to help cut the bureaucratic red tape at the IRS and how he and his team have clawed back $1.2 million in tax refunds for North Jersey families in the last two years.

Gottheimer was joined by three Fifth District residents — Jay Hirschhorn, Stewart Bard, and Nile Hagag — who waited months, and in some cases more than a year, to get back what was rightfully theirs: their tax refund. He was also joined by Bergen County Commissioner Mary Amoroso and Ralph Thomas, the CEO and Executive Director of the NJ Society of Certified Public Accountants.

Gottheimer’s Taxpayer Action Plan includes the following steps:

• Demand that the IRS fix their antiquated bureaucracy and create an immediate plan to efficiently and effectively process the backlog of millions of tax returns mailed to them;
• Request that the IRS boost resources at the Taxpayer Advocate Service — an office within the agency devoted to taxpayers’ interests, including hiring and training new taxpayer advocates;
• Upgrade the antiquated, out of date IRS tax processing technology that was created in the 1960s;
• Request that the IRS to report to Congress in the next 30 days with their plan to address the backlog;
• Help the Fifth District to claw back their tax refunds by working one-one one with residents and families to track down their tax returns and expedite the process of receiving their refunds.

In recent months, Gottheimer has helped lead several efforts to urge IRS Commissioner Charles Rettig and U.S. Treasury Secretary Janet Yellen to create an action plan to solve this massive backlog and ask them to boost resources at the Taxpayer Advocate Service, including hiring and training new taxpayer advocates.

“The IRS bureaucracy is costing people like Stewart Bard thousands of dollars that they are due back in their returns. That’s money to help pay for groceries, a winter jacket, home heating bills, or to fix a car,” said Congressman Josh Gottheimer (NJ-5). “It’s just not right, and, from my seat on the Financial Services Committee, I’ve been all over the IRS and Treasury Department. That’s why, this morning, I’m announcing my Taxpayer Action Plan — to help cut the bureaucratic red tape that led to this backlog at the IRS, get these returns processed, and your well-deserved dollars back in your pockets.”

Right now, nearly 24 million American taxpayers — including families who live right here in North Jersey — are still waiting for the IRS to process their tax returns from last year — with many refunds being held up for nearly eleven months. Delayed IRS refunds and returns are affecting millions of Americans and small businesses. When a tax return is delayed, that might mean a family can’t afford a down payment on a mortgage or apply for a student loan because they can’t provide the required tax transcript.

Since the start of the pandemic, Gottheimer has helped claw back $1.2 million in tax returns for North Jersey residents.

“I decided to get in touch with Josh Gottheimer’s office and spoke to Mike,” said Stewart Bard, a resident from Westwood. “Thank God I spoke to Mike and got the refund.”

“While we commend the measures the IRS has recently taken to suspend sending certain notices and to realign their staff to address the backlog of returns, more can and should be done,” said Ralph Albert Thomas, CPA, CEO and Executive Director of the New Jersey Society of Certified Public Accountants. “I thank Congressman Gottheimer for helping to bring the IRS service issues to light for the benefit of taxpayers here in New Jersey and across the country.”

Video of the announcement can be found here.

Gottheimer’s remarks as prepared for delivery: 

I want to thank Bergen County Commissioner Mary Amoroso, and three Fifth District residents — Jay Hirschhorn, Stewart Bard, and Nile Hagag, and Ralph Thomas, CEO and Executive Director of the NJ Society of Certified Public Accountants — for joining me here today in Paramus.

We’re here today outside the IRS Taxpayer Assistance Center in Paramus to sound the alarm on the massive backlog of tax returns keeping hard-earned dollars out of the pockets of Americans across New Jersey and the country. Right now, nearly 24 million American taxpayers — including far too many families who live right here in North Jersey — are still waiting for the IRS to process their tax returns from last year — with many refunds being held up for nearly eleven months. Yes, you heard me right – 24 million from last year. According to recent IRS data, the agency has caught up processing only to April 2021.

January 24th marked the start of tax filing season this year. But, instead of preparing new tax returns, the IRS carried over a backlog of six million unprocessed individual returns, 2.3 million amended individual returns, one million unprocessed employment tax returns, and half a million amended employment tax returns. To put this in perspective, there are typically only around 1 million unprocessed returns or fewer around the start of a new tax season.

You know, like most folks, I think taxes they are far too high in Jersey, which is why, among other steps, I’ve worked so hard to restore the State and Local Tax Deduction, or SALT. But now, the IRS bureaucracy is costing people like Stewart Bard thousands of dollars that they are due back in their returns. That’s money to help pay for groceries, a winter jacket, home heating bills, or to fix a car. It’s just not right. And, from my seat on the Financial Services Committee, I’ve been all over the IRS and Treasury Department.

That’s why, this morning, I’m announcing my Taxpayer Action Plan – to help cut the bureaucratic red tape that led to this backlog at the IRS, get these returns processed, and your well-deserved dollars back in your pockets.

First, I’ve contacted the IRS, and demanded that they fix their antiquated bureaucracy and create an immediate plan to efficiently and effectively process the backlog of millions of tax returns mailed to them.

In recent months, I have sent multiple letters to IRS Commissioner Charles Rettig and Treasury Secretary Janet Yellen urging them to get their act in gear and create an action plan to solve this massive backlog. I’ve also asked them to boost resources at the Taxpayer Advocate Service — an office within the IRS devoted to taxpayers’ interests, including hiring and training new taxpayer advocates — and to report to Congress in the next 30 days with their plan to fix this mess. The red tape is hurting hard-working taxpayers.

Second, even as we await the IRS and Treasury Department to fix these alarming issues, I’m taking action to help Fifth District residents right here claw back their tax refunds. My office and I have been working one-on-one — day in and day out — with our residents, to track down their tax returns and expedite the process of receiving their refunds. Since the start of the pandemic alone, we’ve helped claw back $1.2 million in tax returns for the people of North Jersey. That doesn’t include the millions more since I was elected.

Third, we need to fix the antiquated IRS technology that’s way out of date and needs immediate upgrading. The agency’s primary system for processing individual tax account data was created in the 1960s – yes, when Gilligan’s Island was all the rage. Since then, Taxpayer Advocate Service has pushed the IRS for years to improve its IT system, to help get returns processed and checks out the door as quickly as possible. Last year, the House passed legislation which contained resources to modernize technology at the IRS. Now, it’s time for the Senate to take it up.

Today, to put a fine point on why we need a Taxpayer Action Plan, you heard from three residents who have experienced first-hand how difficult it can be to receive your tax refund on time from the IRS and the financial strain it can place on someone and their family.

Stewart Bard from Westwood filed his return in March 2021, requesting a well-earned refund of $3,600. But, it was radio-silence from the IRS until August, when the agency finally told him that they adjusted his return to about a thousand dollars less. Stewart didn’t argue and he called the IRS a handful of times to figure out where his refund was and frequently checked online for an update. He was never able to speak with someone at the IRS. He was passed from one automated message to another. Government bureaucracy at its worst!

Jay Hirschhorn from Fairlawn sadly lost his mother in 2019, and her tax return check went missing, which meant he needed the IRS to send him a new check.

After checking the IRS website, Nile Hagag from Park Ridge believed that his return was processed, but he received nothing. When we called the IRS to check, our office found out that the agency had no record of his returns.

Here’s the good news – and what we will do for any family in the Fifth District — we were able to work with each person here to track down their tax returns and get them the thousands of dollars in refunds they were rightfully owed. They waited months — and in some cases more than a year — and, unfortunately, it took a call from me and my team to help them fight to get back what was rightfully theirs – their tax refund. Their tax dollars.

Again, these three residents are just a small handful of the more than $1.2 million in tax refunds my office and I have been able to help claw back from the IRS in just the last two years — all incredible wins for hard-working families across Northern New Jersey. That’s 1.2 million from the IRS in just the last two years – that’s a new number we are announcing today. But the question is this: how many more Jersey families, including the 24 million nationwide in the last year alone, have been stiffed by the IRS?

I’m always here to help and fight the IRS for people who aren’t getting what’s rightfully theirs. But it shouldn’t take me picking up the phone. It should just happen. Unfortunately, too often it just doesn’t.

A few more facts: Three out of four Americans receive an annual tax refund from the IRS — often a family’s biggest check of the year. As of February 18th, the average national refund was $3,536 — more than $700 higher than last year’s payment of $2,815. In recent years, New Jersey has had a higher than average refund amount nationwide, and has been among states with the highest average tax refund.

These are dollars that New Jersey taxpayers have earned and deserve for a year of hard work.

Last year, about 77 percent of taxpayers received refunds and we can expect that number to be similar, if not greater, this year.

Let’s talk about the real world consequences of the IRS’s return backlog. When a tax return is delayed, that might mean a family can’t afford a down payment on a mortgage or apply for student loan because they can’t provide the required tax transcript. It’s ridiculous – and these are real world stories I’ve heard from my constituents.

That’s why, since I was elected, I’ve made it a priority to fight to claw back these dollars for North Jersey families. We can’t let the IRS hold up money that should be in your pockets because red tape is getting in the way of action. The IRS has no right to sit on tax dollars that belong to the American people.

Again, I’m calling for the IRS and Treasury to take immediate steps to eliminate the massive backlog of unprocessed tax returns, including demanding that the IRS’s Taxpayer Advocacy Service hire and train new taxpayer advocates without delay and bring immediate relief to our taxpayers.

I’m also working with residents across the Fifth District — including Jay, Stewart, and Nile who are here with us today — to ensure that they receive their full federal tax refunds.

Now, aside from outdated technology, what else has caused these massive backlogs over the last two years? Some of it has been caused by the same COVID challenges facing every organization: the IRS faced office closures early in the pandemic coupled with limited federal investment for the agency, extra workload from COVID-19 programs, and, as I mentioned earlier, staffing shortages.

Like many businesses across the country, the pandemic spurred massive turnover. Staffing levels are down twenty-two percent from 2010 and, after massive budget cuts during the last Administration, the agency has the same level of staffing as it had in the 1970s — despite the U.S. population growing by sixty percent since then. It’s submission processing unit — the employees responsible for opening the mail — lost twenty percent of its staff last year to retirements, departures, and transfers to other IRS departments.

In 2021, about eleven percent of the 282 million calls made to the IRS were answered — calls that Jay, Stewart, and Nile were tirelessly making to try to get tax refunds.

That’s why with the new tax filing season in full swing, and delayed IRS returns affecting millions of Americans and small businesses, as part of my Taxpayer Action Plan, I am calling on critical steps for the IRS and Treasury Department to find solutions to process the backlog and immediately get dollars into the pockets of American taxpayers. Let’s be clear: there is nothing partisan about this issue. It’s just about what’s good for all Jersey families.

Overall, I will continue to be focused on affordability for Jersey families – to help with things like gas, groceries, and utilities. This effort is part of my Affordability Agenda for Jersey, tackling supply chain issues, lowering prescription drug costs, and cutting tax by restoring the State and Local Tax (SALT) deduction.

By all of us working together, at every level of government, to get more dollars back in the pockets of North Jersey’s families, here in the greatest country in the world, I know that our best days will always be ahead of us.

Thank you, God bless you, and may God continue to bless the United States of America.

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