At the beginning of the COVID pandemic in March 2020, the Internal Revenue Service appropriately stopped most enforcement with its People First Initiative. Like most businesses and organizations, the agency moved to remote work, causing a disruption in its ability to enforce compliance.
Most audits, field collection and automated compliance notices were halted so the IRS could focus on the massive effort of distributing rounds of stimulus payments. Remote work also meant return-processing backlogs. The IRS struggled to get back to normal operations as the backlog of unprocessed returns exceeded 35 million. During 2020-2022, the agency received an unprecedented number of phone calls, stifling its ability to return to compliance enforcement work.
There were some attempts by the IRS to re-engage its collection enforcement operations. The service restarted some collection enforcement in 2020 and 2021, with mostly Social Security and starting income tax refund levy notices and some reminder notices — but this enforcement was short-lived due to mounting service needs. In early 2022, IRS campus collection and non-filing compliance enforcement halted in favor of the IRS catching up on its backlog of returns and answering its phone lines. The IRS refocused its workforce in a surge effort to get back to normality.
Campus compliance functions were not the only areas affected by the pandemic. IRS field collection (i.e., its “revenue officers”) was also halted in March 2020 — but field collection gradually returned later that year. In 2020-2022, IRS field revenue officers were appropriately sensitive to individuals and businesses that were negatively impacted by the pandemic. As such, the IRS provided a great deal of discretion in using levy and lien actions on delinquent tax debtors.
IRS field collection gradually increased in 2022. Currently, with additional newly hired and trained revenue officers, field collection appears to be back to full capacity.
Overall, during the pandemic, the IRS rightfully put aside many of its enforcement functions in favor of helping taxpayers through the pandemic. To that end, there were tradeoffs in not enforcing collection during the pandemic. IRS data and changes to collection operations over the past four years show 10 clear lingering effects on post-pandemic IRS collection, which are detailed below.
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