The COVID-19 pandemic not only impacted people’s lives, in some cases, it also impacted their tax returns. According to a Sept. 2021 report issued by the Treasury Inspector General, the widespread closures of tax processing centers throughout the US led to an unprecedented backlog of tax returns.
“As of the week ending December 31, 2020, the IRS had more than 7.9 million
paper-filed business returns that still needed to be processed. In comparison, the IRS had 239,285 paper-filed business returns that were in process as of December 31, 2019,” the report said, adding that in some cases, penalties were “inappropriately assessed.”
Both the US Department of the Treasury and the IRS say they’re committed to an “aggressive plan” to end the pandemic-induced backlog before the close of the year.
“Since the pandemic began, IRS employees have been called on to go above and beyond for the American people, and they have met the moment. But they’ve had to do so without adequate resources and funding, which is why the agency faces the challenges that it does today,” said Deputy Secretary of the Treasury Wally Adeyemo in a March 2022 press release. “The Biden Administration is committed to getting the IRS the stable, long-term funding it needs to be able to serve the American people,” said Deputy Secretary Adeyemo.
The backlog has not only led to a significant delay in processing returns but it’s also led to delays in people receiving their tax refunds. The IRS notes that millions of taxpayers are still impacted.
“IRS employees have been working tirelessly to process backlogged returns and taxpayer correspondence. To ensure inventory is back to a healthy level for next filing season, we are leaving no stone unturned—taking an all- hands-on-deck approach to ensure as many employees as possible are dedicating time to return processing,” said IRS Commissioner Charles P. Rettig. “This includes bringing on new employees and reassigning current IRS employees to process inventory.”
To tackle the backlog, the IRS said they’ll be taking the following steps:
- Hiring 10,000 new employees
- Creating a new 700-person surge team to process new returns
- Maintaining initial surge team to process amended returns and taxpayer correspondence
- Paying overtime to thousands of IRS employees
- Supporting additional contractor support for inventory
If you’re among the millions of taxpayers who have been impacted by the IRS backlog and you have questions about the status of your return, or you have questions about how the backlog will impact your 2021 tax return, we can help. Call Hughes, Snell & Co., PA today to speak with an expert.