CINCINNATI — The IRS website says it currently has more than 10 million unprocessed individual tax returns dating back to 2021 alone. It usually only has about 1 million outstanding returns going into tax season. Experts say those delays and other systemic issues in the IRS help perpetuate the cycle of poverty for marginalized people, especially Black Americans.
Yvonne Howard of Avondale said she has suffered because of the IRS’s processing delays firsthand.
The 64-year-old thought she would spend her days in retirement enjoying a quiet, modest life in her Cincinnati Metropolitan Housing Authority (CMHA) unit. It was supposed to be a pleasant change of pace from her hectic, old job and a chance for her to focus on her health. However, a mix-up between her old employer and the IRS disrupted her plans.
"I was actually panicking," Howard said. "I'm thinking that they're going to take everything that I have."
Howard was mistakenly slapped with an exorbitant tax bill after the CMHA, a funder for her old employer, erroneously entered her name and her income into a 1099. Even though CMHA admitted to the error, the IRS told Howard she would have to pay $29,000. This happened back in 2019; the IRS still hasn't processed her claim to correct the bill.
"This is 2022 and you still processing? Come on. I understand you're short-staffed or whatever but I don't think this should be going on for this long," Howard said.
Howard said she has suffered from two heart attacks in part due to the stress of the situation. She is now stuck with another bill for $79,000 for her heart operation.
Howard had less than $10,000 in her savings account at the time of the mix-up. Now, she has a simple demand for the IRS:
"The stress that they've caused me, and the medical bills that I've wracked up because of a lot of this stress, I feel that between them and CMHA that there should be some kind of compensation," Howard said.
Howard's lawyer, David Wovrosh at the Legal Aid Society of Greater Cincinnati, said there is a host of systemic issues behind delays.
"The IRS has been underfunded for the better part of a decade now," Wovrosh said. "They have consistently used outdated technology, they are understaffed. The pandemic has just made that worse."
The Center on Budget and Policy Priorities reports the IRS budget has dropped by about 20% since 2010. Its workforce has declined by about 30% in the same time period. As a result, Wovrosh said marginalized people are kept waiting for returns and tax credits meant to take them out of poverty.
“They can't afford a professional to assist them with this, which would maybe make that process move a little bit quicker,” Wovrosh said. “So, unfortunately, again we see a system where people are supposed to receive these tax credits in a timely fashion to lift them above the poverty line. But they can't simply because they can't afford the time or the resources to do that."
Wovrosh said race plays an important factor. He sees people of color disproportionately struggling in their dealings with the IRS in the Southwest Ohio area. He said 61% of the Legal Aid Society's clients are Black.
"Make sure you pay attention to every document that comes from the Internal Revenue,” Howard said. “Once the information gets destroyed or submitted wrongly, you're going to be in a situation that I'm in—waiting three years to hear about a mistake that was made that has been corrected, but you still haven't done anything about it."
Monique John covers gentrification for WCPO 9. She is part of our Report For America donor-supported journalism program. Read more about RFA here.
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