What You Need to Know
- As of early February, the IRS had about 17.6 million tax returns and about 5.9 million pieces of taxpayer correspondence that require manual processing.
- Short-term steps can be taken to process returns more quickly, IRS Taxpayer Advocate Erin Collins said.
- Collins suggests increasing pay for IRS employees processing returns, who typically start at less than $25,000 a year.
Paper processing remains the Internal Revenue Service’s “biggest challenge, and that will continue throughout 2022,” Erin Collins, the IRS taxpayer advocate, told senators Thursday.
As of late December 2021, the IRS “still had backlogs of 6 million unprocessed original individual returns (Form 1040 series) and 2.3 million unprocessed amended individual returns (Forms 1040-X) — with some return submissions dating back at least to April and many taxpayers still waiting for their refunds 10 months later,” Collins testified before the Senate Finance Committee.
In addition, “more than 2 million employers’ quarterly tax returns (Forms 941 and 941-X) remained unprocessed,” she said.
As of early February, the IRS “had in its inventory about 17.6 million tax returns and about 5.9 million pieces of taxpayer correspondence/Accounts Management cases (excluding amended tax returns) that require manual processing,” Collins testified.