“The IRS caught up in processing paper-filed original Forms 1040 and various business returns; refunds were generally issued quickly; and taxpayers calling the IRS were much more likely to get through — and with substantially shorter wait times,” National Taxpayer Advocate Erin Collins said in a statement. “Overall, the difference between the 2022 filing season and the 2023 filing season was like night and day.”

A large amount of the delays that the IRS experienced involved the Employee Retention Credit, a refundable tax credit Congress authorized to encourage employers to retain employees during the COVID‑19 pandemic. The program allows employers to receive up to $26,000 per employee. The report said that the IRS had received a large number of fraudulent claims and has placed promoter claims involving the ERC on its “Dirty Dozen” list of tax scams.

“If the IRS pays out claims quickly without taking the time to review them individually, it will be making some payments to individuals potentially engaged in fraud,” Collins said. “If it takes the time to review claims individually, legitimate businesses who need the funds Congress authorized to help them stay afloat may not receive them in time.”

Wednesday’s report also urged Congress to delegate more funding to the IRS to help it upgrade its information technology and reduce delays in refunds.

“[W]ith adequate funding, leadership prioritization, and appropriate oversight from Congress, I believe the IRS will make considerable progress in the next three to five years in helping taxpayers comply with their tax obligations as painlessly as possible,” Collins said.