A growing IRS backlog

Here are three of the week's top pieces of financial insight, gathered from around the web:

A growing IRS backlog

The IRS is still sorting through more than 20 million tax returns from last year, said Alan Rappeport in The New York Times. The agency was "turned into an economic relief spigot responsible for churning out checks and other stimulus payments to millions of Americans" during the pandemic. But its workforce of about 75,000 — the same size it was in 1970 — is struggling to reduce a backlog of about 24 million paper filings that "continue to clog creaky systems." At the IRS's primary paper-processing center in Kansas City, clerks must stamp each filing by hand. According to one employee, "a surprisingly large amount of time" is spent "looking for carts to put files on and staplers for stapling files together."

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Leaning back at work

Not everyone is quitting their job. Many workers are just paying less attention to it, said Aki Ito in Business Insider. "The pandemic created ideal conditions" for some to "strategically dial back at work." The hot labor market has ensured job security, while the rise in remote work is making it harder for managers to monitor the effort workers are putting in. "Many Americans would call these employees lazy." But the workers I've spoken with say "they're making a considered, deliberate decision" as a form of resistance against "hustle culture." Executives think hauling people back to the office will make them feel like they are part of a team again. But after getting used to remote work, many employees "don't want to pal around with their co-workers." This new attitude "threatens to upend the all-consuming emphasis on career that has dominated America for decades."

New rules for private equity

"Pay attention to the SEC's overhaul of private capital," said Robert Armstrong and Ethan Wu in the Financial Times. Among a sweeping set of rule changes proposed for hedge funds and private equity is the requirement for public disclosure of large ($300 million) derivatives positions that can have market-wide effects. "Trades that can spread heavy losses to other firms should probably be public knowledge." Other rules aim to increase transparency, giving new protections to institutional investors — clients that up to now were assumed to be capable of "fending for themselves." It's clear the SEC is focused on the theme that "private investments can have public consequences." But for private capital, this is "nothing short of a 1930s moment."

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