IRS Crushed by Tax Return Backlog as Pileup Surpasses 21 Million

Jul 24, 2022 | Blog, Uncategorized

The ongoing backlog at the Internal Revenue Service has continued to balloon over the past year, in spite of its efforts to catch up. According to a tax attorney in San Jose, the latest word is that more than 21 million unprocessed tax returns are still waiting to be dealt with as of May 31, 2022. This figure is up 20 million from the previous year, as evidenced by information reported to Congress in June.

Erin Collins of the IRS stated that the agency, taxpayers, and employees are all experiencing the negative effects of this backlog. Collins leads the National Taxpayer Advocate, an organization within the IRS that functions independently. Collins added that the growing backlog is very concerning, especially since millions of filers have been waiting as long as six months or more for their refunds.

Paper Returns Have Contributed to Backlog

Last year, over 90 percent of taxpayers e-filed, but approximately 17 million filed paper returns, and the latter have contributed to the backlog according to Collins and other individuals. According to one Bay Area tax attorney, refund delays for certain paper returns filed this year have exceeded six months, with some individuals waiting 10 months or more to receive their refunds.

The report sent to Congress in June addresses this problem and also highlights “missed opportunities” for the IRS over the past year. Collins stated that after identifying problems with paper returns years ago, the IRS could have taken steps to reassign current workers to such tasks, which ultimately could have decreased the number of tax returns that ended up in the current logjam.

The report stated that over the last year, the IRS also may have increased efficiency with new scanning technology, or moved faster to use the $1.5 billion they were awarded as part of the 2021 American Rescue Plan to recruit new workers to help with the backlog.

woman waiting

IRS Spokesperson Insists Progress Has Been Made After the Hiring of New Workers

Jodi Reynolds, an IRS spokesperson, said in a statement that this agency is dedicated to having proper inventories by the end of 2022, and that unprocessed tax returns are being handled more quickly after “significant new hiring.” She went on to say that the National Taxpayer Advocate’s June report does not contain the most accurate numbers. She also said that mandatory overtime has been implemented, as well as new approaches that involved shifting workers around to complete additional tasks. In a March announcement, the IRS outlined a plan to hire 10,000 new workers, but to date, it has not even reached 5,000.

Chuck Rettig, IRS Commissioner, stated earlier this week in a news release that the IRS remains focused on doing everything that can be done to hasten the speed at which returns are processed.

As of June 10, 2022 approximately 4.5 million tax returns from 2021 had been processed, leaving about 500,000 still in need of attention. This does not mean that 4.5 million filers have received their refunds yet, but simply that their returns have finally been processed. The IRS expects to complete the remainder of the 2021 returns that were filled out with no errors in early July. Those who owe back taxes, or have errors on their returns, may still have to wait to have theirs processed. A tax attorney in San Jose is the best person to speak to about tax liens, filing complicated returns, or any other issue that a taxpayer may be concerned about.