June 24, 2022
  • June 24, 2022

RS in chaos: nearly 35 million tax returns are STILL unprocessed

By on July 6, 2021 0



Internal Revenue Service faces a backlog of 35 million unprocessed tax returns, government watchdog says as pandemic and economic relief efforts combine to overwhelm the agency and force some people spending hours chasing overdue repayments.

The National Taxpayer Advocate (NTA) submits two reports to Congress each year: an annual report, submitted in January, and a goals report, submitted in June.

In its most recent report, the NTA says, “This was perhaps the most difficult reporting season that taxpayers, tax professionals and the IRS have ever experienced.”

One of their largest phone lines – the 1040 customer helplines for individual tax returns – reported that only three percent of the 85 million callers reached a human being.

The NTA released its most recent report in June, showing the performance of the IRS. Government watchdog found IRS faced ‘perfect storm’ of pandemic problems, increased demands on it and budget cuts

Erin Collins, the National Taxpayer Advocate, is seen in May speaking before a congressional committee - the financial services and general government subcommittee hearing on the

Erin Collins, the National Taxpayer Advocate, is seen in May speaking to a congressional committee – the Financial Services and General Government Subcommittee hearing on “Internal Revenue Service: Closing the Tax Gap and Improving taxpayer services “. In her report, she sharply criticized the current performance of the IRS

The NTA found that around 17 million paper tax returns are still waiting to be processed and that around 16 million more returns have been put on hold because they require further review manually.

2.7 million additional amended tax returns were not processed.

Washington Post columnist Michelle Singletary said the IRS is operating critically.

She said she had been trying to fix an issue since November.

“The agency is a real mess. You are right to be crazy as hell when you cannot reach someone to explain to you why your deposit or refund was not processed, ”she wrote.

“And, yes, I swore, because the time to be polite and forgive IRS failures is so past.”

The IRS has been tasked with handing out stimulus checks and overseeing new family allowance policies, as well as dealing with rising jobless claims - all during a pandemic and on a shrinking budget

The IRS has been tasked with handing out stimulus checks and overseeing new family allowance policies, as well as dealing with rising jobless claims – all during a pandemic and on a shrinking budget

The backlog is four times that of 2019, when the IRS had 7.4 million unprocessed returns.

The authors noted, however, that data was available until May, so the backlog may have narrowed since then.

The delay means millions of people are waiting for their returns – 70 percent of personal income tax returns included refunds, according to the NTA, with an average of $ 2,800.

“Processing delays are very significant because most taxpayers pay too much tax during the year through payroll deductions or quarterly payments and are entitled to refunds,” said Erin Collins, counsel for the taxpayers, in his report.

The IRS disputed the NTA’s findings on Wednesday, saying they “do not reflect the IRS’s current situation.”

He said, “The demand for phones has reached historically high levels never seen before.

“Our ability to answer phone calls reflects the amount of staff available. “

The statement also said some of the statements counted by the attorney “do not necessarily reflect unprocessed tax returns,” citing as many as 2.1 million personal and business tax returns linked to cases of theft. ‘identity.

IRS backlog in May stands at 35 million returns

IRS backlog in May stands at 35 million returns

IRS Commissioner Charles P. Rettig (pictured June 8 in Congress) defended his organization's work

IRS Commissioner Charles P. Rettig (pictured June 8 in Congress) defended his organization’s work

IRS Commissioner Charles P. Rettig also told the Senate Finance Committee earlier this month that the agency processed more than 137 million individual tax returns and sent out refunds totaling more than $ 281 billion. of dollars.

The overwhelming majority of the 35 million unprocessed returns relate to the 2020 production season that were filed in 2021.

The IRS was faced with what the NTA described as “a perfect storm”.

Despite severe cuts over the past decade, the IRS has had to issue a third round of economic assistance payments, implement new rules affecting unemployment benefits, and new eligibility guidelines around other credits. tax.

The IRS is now also responsible for the new children’s allowances – despite, between 2010 and 2019, the IRS budget fell 20%, with the number of full-time employees declining by a similar amount.

John Koskinen, who served as IRS commissioner under Presidents Barack Obama and Donald Trump, said the IRS did not have enough staff or funding to do its job.

“It’s a problem, but no one should be surprised,” he told the Washington Post.

John Koskinen, a former IRS chief, testifies before Congress in May 2016

John Koskinen, a former IRS chief, testifies before Congress in May 2016

“You can’t keep loading more stuff on an agency without enough people and expect things to go well.

“The problem is not with the very hard working IRS employees. It’s with the Republicans in Congress who have refused to provide adequate funding for 10 years.

Republicans led the cuts to the IRS budget, but Joe Biden pushed to increase the agency’s funding to $ 80 billion to crack down on tax fraud.

A bipartisan infrastructure deal reached with the White House earlier this month includes up to $ 40 billion in additional funding for the agency, although it is not clear when that could pass.