The Internal Revenue Service will not clear up its return-processing backlog for another month, but the service is no further behind now than it was at this time last year, Commissioner Roscoe L. Egger Jr. said yesterday.
The Philadelphia Service Center, which has had computer and human problems even more severe than those in the rest of the country, will not wrap up its backlog until sometime in August, Egger added. The center handles tax returns from the District and Maryland, while those from Virginia go to Memphis, which has a better record.
In a now-familiar ritual, Egger spent an hour on the hot seat before members of the House Ways and Means Committee's oversight subcommittee. The IRS has almost entirely caught up from the long processing delays it experienced earlier in the tax-filing season, Egger said. But the comments from members were no friendlier.
"There's a lot of latent hostility out there toward the IRS," said Rep. Richard T. Schulze (R-Pa.).
"Yours is a hard agency to love, even for those of us required by duty to do so," said Rep. Bill Frenzel (R-Minn.).
Egger said that, as of June 13, about 550,000 taxpayers across the U.S. who filed their returns on time have not yet received refunds to which they are entitled. Two weeks previously, that number was 1.1 million.
The IRS has processed more returns than it had at this time last year, and has issued 600,000 more refunds, Egger said. The bad news is that, because the total number of returns rose by 5 million to almost 100 million for tax year 1984, absolute numbers don't tell the whole story. On a proportional basis, the IRS still may be behind.
Despite the processing and refund delays, the IRS has paid $900,000 less in interest on late refunds -- it must pay 13 percent on all refunds not mailed by June 1, with the payment period starting April 15 -- than it had by this time last year. The amount of the average refund has risen from $814 to $833.
That seemed odd to subcommittee Chairman J. J. (Jake) Pickle (D-Tex.), who wanted to know how more returns and more and larger refunds could add up to less interest if the IRS no longer was running behind. Egger said the IRS had been wondering about that, too.
"I can't put it all together. It doesn't add up," Pickle said. "It sounds to me like you need a new computer." The new, $104 million Sperry Univac installed by the IRS this year has been responsible for a large portion of the agency's processing difficulties.
Pickle also jumped on Egger for contending, on the one hand, that few or no tax returns had been lost but setting up a special system, on the other hand, to handle duplicate returns filed by those who haven't gotten their refunds after 12 weeks. Are returns lost or not, Pickle wanted to know.
"They're in the system someplace, or in our files," Egger said.
"So why do people need to file duplicate returns?" Pickle asked.
"They don't," Egger responded. "We will find them eventually."
"It seems to me you've lost a lot of returns out there and don't know where they are," Pickle said.
Pickle also revealed that the backlog of taxpayer correspondence at the Philadelphia center, which had declined during the spring, has shot back up again and now stands at 176,000 pieces of mail.