Tax Refund Delays: Despite Best Efforts, IRS Is Still Experiencing Backlog and Staffing Issues
As another exciting tax season drew to a close, the IRS is now attempting to keep on top of processing 2022 returns while it works to reduce the millions of unprocessed filings from 2021.
According to the Interim Results of the 2022 Filing Season report released on May 2, the Treasury Inspector General for Tax Administration (TIGTA) states that continued personnel shortages are limiting the agency’s efforts to cope with a backlog of more than 16.4 million tax returns, transactions and Accounts Managements cases leftover from 2021.
However, in a Senate Finance Committee hearing at the beginning of April, IRS Commissioner Chuck Rettig testified that the agency has cut the number of unprocessed 2021 returns to 2.7 million and he expects the backlog to be dealt with by the end of 2022.
Of the predicted 160.7 million individual income tax returns the IRS will receive in 2022, 54.7 million were already filed as of March 4 and $129.2 billion in refunds have been issued to American taxpayers. Of the returns received, 97.2% were filed electronically and 1.2 million returns were completed using the IRS Free File software service.
Apart from the backlog in processing returns, the report also states that the IRS is backed up with hiring submission processing and accounts management employees to deal with the barrage of returns and calls from taxpayers. As of March 17, 2022, the IRS had hired 76% of its target 5,000 Accounts Management workers, the report also states that the agency had only offered 521 individuals submission processing positions out of its hiring goal of 5,472 new workers (9.5%).
An IRS tax backlog isn’t a new phenomenon. But while the report points to the ongoing staffing deficiencies and the implementation of new law provisions for the 2021 tax year, the agency states that the recent backlog increase is primarily down due to the pandemic.
Responding to an April 11 Government Accountability Office report examining the IRS’ workload and detailing recommendations to remedy the backlog, the IRS’ Douglas O’Donnell explained, “From an operational standpoint, we continue to work toward eliminating the rolling backlog of inventory that developed during the closures of our [Submission Processing Centers] from late March through June and July 2020.”
“This caused a complete stoppage of the handling of incoming mail receipts, which included tax returns, tax payments, amended returns and other correspondence,” he added. “The stoppage also extended to paper tax returns that were already in process at varying stages of completion.”
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