The agency has several million pieces of backlogged work from prior years
by Richard Rubin, The Wall Street Journal, January 10, 2022
WASHINGTON—The Internal Revenue Service will begin accepting 2021 individual income-tax returns on Jan. 24, and administration officials are already warning of paperwork backlogs and difficulty reaching IRS employees on the telephone during this year’s filing season.
“In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me,” IRS Commissioner Charles Rettig said in a statement. “IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us.”
This tax-filing season—with an April 18 deadline for most individuals—will be complicated for a few reasons. For starters, the IRS is in a hole, because it enters the year with several million pieces of backlogged work from prior years instead of about one million in a typical year. That stems from office closures during the pandemic as well as the challenge of administering new tax benefits and programs created by Congress over the past two years.
The IRS had six million unprocessed 2020 returns as of Dec. 23, plus 2.3 million unprocessed amended tax returns as of Jan. 1. The agency is also running behind on processing employment-tax returns. The IRS said it is opening mail on its normal schedule but taking longer to deal with what’s in the envelopes. People who have sent in missing forms or documents should expect to wait more than 60 days for a response.
Taxpayers will also have to reflect child tax credits and economic stimulus payments they received in 2021 on their returns, adding a source of complexity and potential confusion and mistakes.
Officials are urging people to take several steps to get their tax refunds within 21 days of filing. Basically, anything that doesn’t require human involvement and paper at the IRS can move briskly, while anything else could face significant delays.
Electronically filed returns get processed more quickly, as do requests for direct deposits instead of paper checks. The IRS urges people to establish online accounts at IRS.gov and use the agency’s online explanations to get information rather than calling the agency, when possible.
Tax returns on which the child tax credit and economic stimulus information match the government’s files will move more quickly than returns that have a discrepancy that an employee has to resolve. The IRS is sending letters to taxpayers about their child credits and stimulus payments. Taxpayers don’t have to wait for their 2020 returns to be processed to file their 2021 returns.
The IRS delayed the filing deadline in 2020 and 2021 due to the coronavirus pandemic. This year, there are no plans to do so, Treasury officials said on Monday.
The Biden administration has requested more money for the IRS—much of it for enforcement but also some for service improvements and better technology. Congress delivered some money in March’s coronavirus-relief law, but the bulk of it is tied up in the congressional stalemate over the $2 trillion climate, health and education legislation known as Build Back Better.
Write to Richard Rubin at [email protected]