IRS had backlog of 12 million paper returns by Christmas, says watchdog

Samuel Corum/Bloomberg by way of Getty Photos

The IRS had a backlog of just about 12 million paper tax returns from people and companies as of Christmas, in accordance with a report from the Treasury Inspector Common for Tax Administration.

Because of this, many taxpayers could not have gotten refunds owed from final yr’s submitting season, the watchdog stated in its briefing, which was publicly launched Wednesday.

The Covid pandemic hobbled the company’s capability to obtain, type, distribute and course of paper tax returns, in accordance with the report and company officers.

A lot of that course of, which requires guide entry of information from tax returns, for instance, is not conducive to telework, they stated.

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“In 2020, the IRS discovered itself in uncharted waters, as did the whole nation,” Kenneth Corbin, commissioner of the wage and funding division on the IRS, wrote in response to the findings.

“The Covid-19 pandemic introduced a number of the best challenges to the IRS in its historical past, each by way of having the ability to perform our mission and in defending the well being and security of taxpayers and our personal workforce,” he added.

Corbin additionally urged taxpayers to file an digital tax return this yr, given persistent backlogs.

“We’re hopeful the advantages of digital submitting have been bolstered with the general public and that the expertise of 2020 encourages conventional paper return filers to transform to digital submitting,” he stated in his response, dated March 8.

Paper delays

“Of specific concern is the continued challenges in hiring adequate workers wanted to each proceed to work backlog stock and course of Tax Yr 2020 tax returns on the similar time,” it stated. “This might additional have an effect on taxpayers awaiting refunds and extra Restoration Rebate Credit related to these Tax Yr 2020 returns.”

The IRS briefly scaled again operations as a result of pandemic by closing Submission Processing and Taxpayer Help Facilities, discontinuing face-to-face operations and suspending phone assist strains, Corbin stated.

Closing Submission Processing Facilities hindered the company’s capability to course of incoming mail equivalent to paper tax returns, some funds and correspondence in a well timed method, he stated.

The IRS shifted duties remotely to the extent potential, and all however 1,000 of the 11,000 Submission Processing Heart workers had reported for in-person obligation as of Feb. 24, Corbin stated.

On the similar time, the company was additionally tasked with issuing prior rounds of pandemic reduction, like $1,200 and $600 stimulus checks. The IRS issued greater than 168 million CARES Act funds totaling $280 billion as of Dec. 18, Corbin stated.

The IRS can be searching for to rent extra workers for the 2021 tax season and to alleviate bottlenecks, he added.

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