In a recent study, National Taxpayer Advocate Erin Collins stated that as of May 31, there were 21.3 million paper returns that needed to be processed. This is an increase of 7% from the 20 million paper returns that needed to be processed at this time last year.
Collins stated in the study that “unfortunately, the backlog is still crushing the IRS, its staff, and, most crucially, taxpayers.” For millions of taxpayers, these processing delays are causing unheard-of financial troubles, as well as utter suffering for many.
At the IRS’s request, more than 90% of taxpayers submitted their forms online last year, but over 17 million also mailed paper filings, adding to the backlog of returns. Americans who file their taxes by mail are disproportionately older people.
Because of this, some taxpayers who filed forms on paper have had to wait an exceptionally long period to get their refunds; typical wait times surpass six months. The article claims that some Americans have waited 10 months or more.
The IRS said in a statement that it disagreed with the number of tax returns supplied by the national taxpayer advocate and that the true backlog is closer to 19 million, which is slightly less than it was the year before.
The IRS continues to handle unprocessed tax returns and is dedicated to maintaining healthy inventories before the end of the year, according to a statement from Jodie Reynolds, an IRS representative.
The National Taxpayer Advocate report’s inventory counts are neither the most accurate nor the latest data, according to the report.
This Thursday, the IRS declared that it will soon finish processing every error-free tax return it received for 2021.
A Treasury Department official informed reporters on a call on Tuesday that the agency now has to handle approximately twice as many 2022 tax returns as usual as a result of focusing staff members’ attention on the more urgent backlog of 2021 returns.
By the end of this year, the person said, those paper returns with no errors would be processed.
The backlog of processing returns resulted from disturbances brought on by the pandemic, such as a labour shortage, the monumental chore of dispensing millions of stimulus cheques and adjusting to other tax adjustments in the several COVID-19 relief packages, such as increased child tax credit payments.
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The IRS is gravely understaffed, according to IRS Commissioner Chuck Rettig. For the 2022 tax season, the IRS planned a large hiring drive to help with the backlog of unprocessed returns from previous years, but just 1,500 new personnel were employed. In the next year, it intends to onboard around 10,000 staff.
Additionally, over 500,000 hours of overtime have been worked by those who process original returns this year, and 2,000 personnel have switched from working in other areas of the organisation to concentrating on processing returns.
By the end of 2022, the IRS intends to have inventory levels that are “healthy.”
