In a report submitted to Congress on Wednesday, the nation’s official taxpayer advocate stated that the IRS backlog has gotten worse over the past year and that millions of paper returns filed this year have not yet been processed.
Erin M. Collins, the national taxpayer advocate, stated that the wait time for refunds for tax filers could be up to ten months.
21.3 million unprocessed paper tax returns, at least 10.5 million of which were submitted by individual taxpayers, were waiting in the IRS’s hands as of late last month. Both figures were lower now than they were in 2021, the attorney claimed.
The IRS has poured resources into the problem and anticipates finishing up this week with the last round of tax returns from the previous year. According to the report, the agency will next focus on the forms submitted during this year’s tax season, none of which have been altered.
“I hope the IRS is successful in tackling the backlogged inventory this year as stated by the IRS. Collins stated that, regrettably, the IRS, its staff, and—most importantly—taxpayers are still being severely burdened by the backlog.
According to her, as long as they didn’t make any mistakes, taxpayers who file online, which makes up more than 90% of taxpayers, are in good condition. According to Collins, it may take “far over a year” for the IRS to fix a math error and give a refund if it notices one and starts a formal conversation.
In addition, a lengthy paper process that takes a year to complete is required for the 336,000 taxpayers who have been victims of identity theft.
Collins attributed the backlog to several factors, including persistent funding restrictions and pandemic conditions, but did give the IRS credit for being aware of the issue and making an effort to address it.
Even after Collins finalised her calculations, the agency claimed in a statement that it had made progress.
According to the IRS, there were 19.1 million paper returns that had not yet been processed as of June 10 compared to 19.9 million at the same time last year. Although there were more identified individual returns in the backlog (11.2 million vs. 9.6 million) in 2022, the backlog was worse.
“The IRS continues to make significant progress on the inventory, and this effort is helped by a combination of significant new hiring — having recently received Direct Hiring Authority — as well as adding new contractor support, shifting existing staff, providing mandatory employee overtime, and developing efficiency improvements,” the agency said.
The IRS affirmed that it will continue to work toward its end-of-year objective of clearing the backlog to ensure that no returns filed this year are carried over to 2023.
The IRS has been pushed for more funding by President Biden and Democrats on Capitol Hill. To catch tax cheats, they claim the agency needs to provide better services while also conducting more audits of expensive returns.
According to Democrats, the agency was decimated by budget cuts made during the years that Republicans controlled Congress, which they claim caused the backlogs and sharp decline in complex audits.
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Taxpayers struggle to receive responses to their inquiries as a result of the IRS’s current predicament.
Only 10% of the 73 million calls made to the agency during the recently ended filing season were answered by an employee. On hold for almost 30 minutes on average.
9 per cent of the calls last year were answered by agency employees, who took 167 million calls overall. Last year, it was typical for taxpayers to wait 20 minutes on hold.
