The Internal Revenue Service (IRS) is coping with a record volume of unprocessed tax returns. As a result, refunds may take longer this year than normal.
The IRS currently has about 25 million tax returns from the previous year. Many reimbursements have been on hold for more than a year. With the way this year is going, some may have to wait a while longer. This enormous figure does not include all of the IRS’s paperwork to process. Audits, enforcement and collection operations, audit appeals, notices of tax liens, and penalties are not included in the 25 million tax returns.
Customer service will undoubtedly suffer as a result of the IRS’s ongoing backlog of tax returns to process. The Treasury Department has already stated that response timelines (as well as the content of the responses) may fall short of taxpayer expectations.
Because the IRS processes tax returns in the order in which they are received, 2022 returns are at the end of the queue.
Backlogged Tax Returns Are Just One of Many IRS Issues
Other issues, in addition to dealing with backlogged tax returns, could cause refund delays. Many IRS employees spoke out about how the tax season has gone thus far. They all stayed anonymous because they had not been given permission to publicly remark on the topic. They all said the same things, though.
Due to a couple of serious difficulties, filers might expect delays this year. For starters, the government agency is experiencing staffing issues. They’re having trouble finding, hiring, and training new employees. Furthermore, since the pandemic began, a significant amount of additional paperwork has been introduced, resulting in an increase in the number of errors to be resolved. If that wasn’t enough, politicians are putting pressure on the IRS to get these returns out as soon as possible.
As if hiring and training new employees weren’t time-consuming enough, current employees haven’t been provided with the resources they require. Many of them have been working from home since the outbreak. They didn’t have access to tax returns, audits, or anything else they could require while they were there. The use of federal funds for stimulus cheques was prioritised. As a result, the government agency’s budget was reduced. In addition, as post offices coped with their own issues, paper returns piled up for months. (As a side note, if you can, file your taxes online this year.) It could help to avoid some of these delays.)
IRS Equipment Is Too Old to Efficiently Handle Business
The IRS staffers’ equipment is to blame for some of the ongoing delays. According to the Washington Post, the IRS inspector general discovered that the agency’s supplies are significantly insufficient. The agency’s system contains “outdated dust collectors,” which result in frequent paper jams. The IRS also largely relies on scanners, which causes the agency to lose money.
As a result, the IRS must depend less on automation and more on hand review, adding to the vast backlog of tax returns.