Dealing with the government? Learn patience and plan ahead

Backlogs persist at local, state, and federal levels

By John Love

In June, the IRS issued a news release stating that it had successfully processed the majority of paper tax returns. For 2021, a year behind schedule.

Are you or your business waiting for a response from a government organization? Anything from obtaining an EIN, filing certificates, 1023 applications to everything in between? If so, you’re not alone. The tax return situation is but one of hundreds of examples of delays and backlogs across all levels of government. Processes that require someone to review the submitted information or application seem to be especially prone to slowdowns. Where there’s an automated online system, such as Texas’ SOSDirect, things tend to be a bit more efficient, but not always.

Some agencies offer constituents no way to get in touch. Online chat is often down and phone calls are greeted with an automated response saying no one is available to take the call. It’s frustrating. It’s difficult to resolve most situations without communication and information.

The causes go back to pandemic lockdowns and related staff reductions and retirements. Rehiring and subsequent training of new hires has been slow, extending the delays.

The consequences of these delays are serious for businesses. They’re clogging the business stream, holding up the closing of transactions and affecting bottom lines, making it difficult to open bank accounts and creating risks for many businesses. And when you get a critical mass of that, you’re putting a dent in the overall economy. Not to mention, when the right way to do something becomes unavailable or unduly burdensome, that’s when some will cut corners and take shortcuts.

And the consequences work both ways. The City of Dallas continues to grapple with more delays in its efforts to fix the delays in the building permit approval process. Builders can’t get permits in Dallas, so they turn to the suburbs instead, taking future tax revenue from Dallas and giving it to other municipalities.

While in this situation, it may seem that you can’t fight – or rush – city hall, but you can prepare:

First, practice patience. Expect the process to take longer than you anticipate.

– Plan accordingly. It’s going to take longer than you thought to launch a new business, start building, or close a deal. Incorporate delays into your timelines. Perhaps consider naming your entity something extremely unique and then, in order to use the name you want, obtain an assumed name or amend the name later.

– Be prepared to pay higher fees to expedite processes (but some of these expedited fees are just money grabs, so be wary of those).

– Last resort, hire a third-party firm to hound-dog the process for you.

One bit of progress: This summer Congress gave the IRS a big budget to revitalize its processes and expand its staff. So let’s hope that other government entities at all levels can catch up with their hiring and training and enable their workers, and invest in the technology and processes that allow many of these functions to be done virtually and efficiently.