The IRS is dealing with a record number of backlogged tax returns. Due to this, refunds could take longer than usual this year.
The federal agency currently has almost 25 million tax returns leftover from last year. Many refunds have been on hold for upwards of 10 months. With the way this year is going, some might still be waiting for a while. This huge number does not even include all of the paperwork that the IRS must process. The 25 million tax returns do not include audits, enforcement and collection actions, appeals of audits, notices of tax liens, or penalties.
Due to how many backlogged tax returns the IRS still needs to process, customer service is bound to suffer. The Treasury Department has already warned that response times (and the responses themselves) might not meet taxpayers’ expectations.
Since the IRS works through tax returns in the order that they’re received, that means that 2022 returns are at the very end of the line.
Backlogged Tax Returns Are Just One of Many IRS Issues
On top of dealing with backlogged tax returns, other issues could cause refund delays. There were many IRS employees that spoke up about how tax season has gone so far. Since they were not approved to publicly comment on the matter, they all remained anonymous. However, they all said similar things.
Filers can expect delays this year because of a couple of major issues. For one, the federal agency is having staffing trouble. They’re struggling to find, hire, and train new staff. On top of that, a lot of new paperwork has been introduced since the pandemic started, which means that there are more errors to work through. If those weren’t enough, the IRS is facing pressure from lawmakers on getting these returns sent out.
As if hiring and training new staff isn’t time-consuming enough, current employees have not had the resources they need. Since the pandemic, many of them have been working from home. There, they didn’t have access to tax returns, audits, or any other things that they might need. Federal money was prioritized to go towards stimulus checks. Thus, the federal agency had several budget cuts. Plus, paper returns stacked up for months as post offices dealt with their own problems. (Side note: if you can, you should file online this year. It might prevent some of these delays.)
IRS Equipment Is Too Old to Efficiently Handle Business
Part of the continuous delay comes from the equipment that IRS workers are using. The Washington Post reports that the IRS inspector general has found IRS supplies to be severely lacking. The agency’s system is made up of “outdated dust collectors” that cause multiple paper jams. The IRS also relies heavily on scanners that end up making the agency lose out on money.
Thus, the agency has to rely less on automation and more on manual checking, which further contributes to this massive backlog of tax returns.