Backlog increasing to 35 million tax returns
Millions of people are still waiting for their much-needed refunds. The National Taxpayer Advocate reported that there is a growing backlog of 35 million unprocessed returns. In May the IRS was holding 31 million returns.
The backlog at the IRS comes after a “perfect storm” that created “perhaps the most challenging filing season taxpayers, tax professionals and the IRS have ever experienced,” wrote National Taxpayer Advocate Erin M. Collins. As a result of the pandemic the IRS had to shut down some of its operations, additionally it was also given more responsibility from Congress from several new tax initiatives, such as the three rounds of stimulus checks that were distributed by the IRS. The stimulus required tens of millions of payments by the IRS.
Much of the staff began teleworking due to the pandemic. Consequently, the IRS was required to spend time training employees to work remotely. Many of the tasks can’t be done remotely. Workers must be on-site to receive, sort and distribute mail and to process paper returns.
Reconciliation of the stimulus payments caused a record number of returns to be manually processed this year.
Processing centers are open; however, they were not able to operate at full capacity due to the social distancing requirements.
The Treasury Inspector General for Tax Administration (TIGTA) reported a complaint from IRS staff alleging that a lack of functioning printers and copiers has contributed to the backlog. The service contractors may not have been coming into the sites to replace the old printers due to Covid.
TIGTA reported that the lack of working copiers made it difficult to prepare training packages for new hires. Many new hires are not provided a computer, and the hard copies of training material are the main training resource available.
The IRS received more than 85.1 million calls to its critical 1040 customer support phone line for individual tax returns which is 978 percent from 2018. Consequently, only 3 percent of 85 million telephone calls reached a phone assister on the most frequently called toll-free number.
The ability of the IRS to answer phone calls is determined by the amount of staffing available. The National Taxpayer Advocate stated that the IRS is underfunded by Congress. Congress allocated enough funding for fiscal years 2020 and 2021 to reach a 60 percent level of service.
For fiscal 2022, the IRS is requesting a total program increase of $915.5 million, including $318 million to increase taxpayer assistance, IRS Commissioner Charles Rettig said in testimony for a Senate Finance Committee. The increase in funding was only projected to provide a phone service of 75 percent. However, if Congress approves the increase, it will provide a significant improvement from 2021.
Unless the IRS is requesting more information, there is nothing you can do but keep checking the “Where’s My Refund” tool at irs.gov.
David Zubler is a tax accountant and Enrolled Agent representing clients before the IRS with over 25 years of tax experience. He is the author of four tax books and is the founder and president of Your Tax Care. The company provides business and tax education to the public at its website, YourTaxCare.com. David can also be contacted by email at email@example.com