IRS Backlog Threatens NH Small Business Loan Program | Coronavirus


A chronic staff shortage at the Internal Revenue Service threatens loan applications from New Hampshire small business owners seeking relief from COVID-19 losses, according to a hospitality industry leader.

In response to the pandemic, Congress more than tripled what small businesses could receive in disaster economic impact loans, from $ 150,000 to $ 500,000.

Steve Duprey, a real estate and hotel developer, told U.S. Senator Jeanne Shaheen, DN.H., that the new program rules require the federal Small Business Administration to obtain IRS certification that the loan applicant does not. has no outstanding tax issues.

With the deadline for filing applications at the end of this month, many business owners were unable to get permission from the IRS to complete the process, Duprey said.

In a virtual meeting hosted by the Concord Chamber of Commerce on Wednesday, Shaheen said the IRS crisis was affecting many relief efforts.

What made the agency’s job more difficult was that Congress asked it to do a lot of additional work during the pandemic, including dealing with all federal stimulus checks, she said. .

“So many people are out of the office, working from home, there aren’t that many taxpayer advocates,” Shaheen said. “We need more staff there. “

35 million tax returns

The IRS faces a backlog of more than 35 million unprocessed tax returns at the end of the 2021 reporting season in May – a paperwork clutter four times greater than in 2019 before the pandemic.

The National Taxpayer Advocate, a watchdog group, said in a recent report to Congress that the IRS only has enough funds to achieve a 60% service level.

The IRS received more than 85 million calls for help with personal income tax returns in 2021, up 978% from three years ago.

The NTA analyzed data from IRS calls and determined that only 3% of those who contacted the agency through its most popular toll-free number spoke with a human.

The Inspector General of the Treasury for the Tax Administration also said last month that 8 million individual tax returns remained to be processed at the end of last year.

This was a 1,200% increase, made worse by the fact that millions of unopened mail during the pandemic piled up in trailers parked outside IRS centers, and the agency spent months trying to catch up with him.

The Economic Disaster Loans, which have a 30-year borrowing term, are intended for losses during the pandemic through April 6.

All eligible businesses must repay the loan with 3.75% interest. Non-profit organizations could benefit from the loans which would play at 2.75%.

Robert Henson, an economic legislative assistant in Shaheen’s office, urged Duprey to contact the SBA loan specialist assigned to his case.

“It’s not unique. We are aware of a number of programs in which applicants have requested an IRS audit and are waiting for a response, ”Henson told Duprey. “If you’ve been assigned to an SBA loan specialist, that’s a positive sign. Continue to be in regular contact with this person.

Correction of Congress?

Shaheen said she would study Duprey’s issue in more detail and pledged, if necessary, to push for legislation to extend the timeline for these loans.

The importance of adequate IRS personnel took on renewed importance when a bipartisan group of 20 senators, including Shaheen, announced to the White House an agreement on the outline of an infrastructure bill. of $ 579 billion.

Senate Republicans have opposed the increase in taxes on the wealthy that President Joe Biden initially offered to pay for the program.

Shaheen said Senate negotiators agreed to support payment for the bill in part by empowering the IRS to close the so-called “tax gap” which is the difference between what the agency received in federal taxes. and what their experts say is due.

It is estimated to bring in $ 100 billion, although some analysts, including those at the Urban-Brookings Tax Policy Center, have said it will take time to train IRS staff and develop new anti-virus techniques. -fraud.

Shaheen said many voters are concerned when Congress considers putting more tax experts on the IRS payroll.

“I know a lot of people are worried when they see this because they think it means the IRS is going to sue them for paying more taxes,” Shaheen said.

“It is our responsibility to make sure they don’t do this, unless there is reason to believe that individuals are not paying the taxes owed. “

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