The IRS and its Massive Backlog

        A report that was released this month confirmed what many had long suspected, the Internal Revenue Service (IRS) is very, very behind in processing Tax Returns. This is a situation that will not quickly resolve itself. The Treasury Inspector General said that the backlog was at about 12 million paper returns in December 2020. Even though this report focuses on paper Tax Returns, it’s reasonable to apply this to any paper correspondence as well. How did this happen?

The IRS was put into an unknown situation in 2020 just like every other organization. They moved to remote work as much as possible and closed many distribution centers. However, what is sent to them on paper requires a physical presence. While the mail continued to be delivered, few would enter the offices and do the manual data entry. This is why many are waiting for acknowledgment of payments, or Tax Refunds. The different rounds of Economic Impact Payments (EIP) have also caused them to change focus at times.

        At this point, most of the submission processing center employees have returned to the office. The IRS hopes to get through the work that has piled up over the past year by the end of summer. This is also an example of why E-filing is a much simpler option for Taxpayers. Fling electronically will help to avoid these kinds of problems. If you need help in making this transition, just schedule an appointment with us.

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