After last month promise of the IRS Commissioner, Charles Retting, to process millions of unprocessed returns before December, now after intensive work during the past several months, the Internal Revenue Service announced today that processing on a key group of individual tax returns filed during 2021 will be completed by the end of this week.
According to the IRS, due to issues related to the pandemic and staffing limitations, the IRS began 2022 with a larger than usual inventory of paper tax returns and correspondence filed during 2021. The IRS took several steps to address this, and the agency is on track to complete processing of originally filed Form 1040 (individual tax returns without errors) received in 2021 this week.
As of June 10, the IRS had processed more than 4.5 million of the more than 4.7 million individual paper tax returns received in 2021. The IRS has also successfully processed most tax returns filed this year: More than 143 million returns have been processed overall, with almost 98 million refunds worth more than $298 billion being issued.
IRS employees continue working hard to process these and other tax returns filed in the order received. The IRS continues to receive current and prior-year individual returns and related correspondence as people file extensions, amended returns and a variety of business tax returns.
To date, more than twice as many returns await processing compared to a typical year at this point in the calendar year, although the IRS has worked through almost a million more returns to date than it had at this time last year. And a greater percentage of this year’s inventory awaiting processing is comprised of original returns which, generally, take less time to process than amended returns.
To work to address the unprocessed inventory by the end of this year, the IRS has taken aggressive, unprecedented steps to accelerate this important processing work while maintaining accuracy. This effort included significant, ongoing overtime for staff throughout 2022, creating special teams of employees focused solely on processing aged inventory, and expediting hiring of thousands of new workers and contractors to help with this ongoing effort.
Additionally, thedue to issues related to the pandemic and staffing limitations, the IRS began 2022 with a larger than usual inventory of paper tax returns and correspondence filed during 2021 IRS has greatly improved the process for taxpayers whose paper and electronically filed returns were suspended during processing for manual review and correction – referred to as error resolution. Last filing season, an IRS tax examiner could correct an average of 70 tax returns with errors per hour. Thanks to new technology implemented this filing season, 180 to 240 returns can now be corrected per hour. As of June 12, 2021, there were 8.9 million tax returns in error resolution. As of June 10, 2022, there were just 360,000 returns awaiting correction.
The IRS will continue its intense effort to make progress on processing these paper returns in the months ahead. “IRS employees have been working tirelessly to process these tax returns as quickly as possible and help people who are waiting on refunds or resolution of an account issue,” said IRS Commissioner Charles Rettig. “Completing the individual returns filed last year with no errors is a major milestone, but there is still work to do. We remain focused on doing everything possible to expedite processing of these tax returns, and we continue to add more people to this effort as our hiring efforts continue this summer.”
Rettig emphasized that adding sustained funding increases for the IRS will help the agency add more employees to process tax returns and answer phones as well as help improve technology and ensure fair enforcement of the tax laws.
“Taxpayers and tax professionals deserve the absolute highest-quality service from the nation’s tax system,” Rettig said. “Long-term and consistent funding for the agency is critical to ensuring the IRS is prepared for future tax seasons. It’s also critical for the IRS to be ready to answer the call for the nation during the next crisis, just as the agency did delivering three rounds of historic stimulus payments and advance Child Tax Credit payments during the pandemic.”
The IRS urges people to file as soon as they are ready. There is no need to wait until the last minute before the October 17 extension deadline. Filing sooner avoids potential delays for taxpayers, and it also assists the larger ongoing IRS efforts to complete processing tax returns this year.
The IRS strongly recommends NOT to file a return for a second time even if in the sites “Where is My Refund?” and “Your Online Account” states that the IRS has not received the return, the most common situation would be that they have not been able to process that return yet. If a taxpayer files a rerun twice, it only creates postponements on processing them and delays on the refunds.
Additional details on processing and other operations are available on a special page issue by the IRS, with Q&A on the status of all tax returns until June 17, 2022. Do not hesitate to call us, US Tax Consultants +34 915 194 392, or book an appointment for a free consultation, if you have any further doubts.