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IRS faces tax-return backlog as Tax Day approaches

IRS faces tax-return backlog as Tax Day approaches
© Greg Nash

The IRS is facing a backlog of tax returns as the May 17 filing deadline approaches, leading to millions of Americans experiencing delays in receiving their refunds.

The IRS said on a webpage updated Friday that as of April 30, it had 17.1 million unprocessed individual tax returns, most of which were filed this year.

The unprocessed returns include those for which the IRS needs to make corrections to the amount claimed for the recovery rebate credit. People can receive the credit if they didn't receive their full stimulus payment amounts for the first two rounds of payments.

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The unprocessed returns also include returns that utilized a provision in a coronavirus relief law that allows people to calculate their amounts for the earned income tax credit and child tax credit based on their 2019 income rather than their 2020 income. The IRS in these cases needs to validate the 2019 income figures that are used.

"This work does not require us to correspond with taxpayers but does require special handling by an IRS employee so, in these instances, it is taking the IRS more than 21 days to issue any related refund," the IRS said.

The agency said that taxpayers who filed their returns electronically and received an acknowledgement of receipt don't need to take further action besides promptly responding to any requests from the agency for information.

Taxpayers who filed paper returns can utilize the IRS's "where's my refund" web tool to check on the status of their refunds.

The Taxpayer Advocate Service, an independent office in the IRS that works to help resolve taxpayers' problems with the agency, said in April that when looking at both individual and business tax returns, there is a total of about 30 million returns that are backlogged. 

The IRS closed tax processing centers for several months last year as a result of the coronavirus pandemic, and since reopening, the agency has faced work backlogs. A report released Friday from the Treasury Inspector General for Tax Administration reported that the IRS faces staffing challenges, and that its ability to resolve its backlogs is hindered by the fact that many printers and copiers are not working.