Finance

Nearly 24M Americans still waiting for IRS to process 2020 tax returns

Internal Revenue Service headquarters is seen from Pennsylvania Ave., in Washington, D.C., on Friday, October 15, 2021.
Greg Nash

As Americans get started on their tax returns for the 2021 tax season, the Internal Revenue Service is grappling with a backlog of millions of tax returns from the last tax season, The Washington Post reported.

Nearly 24 million individual and business tax returns that require at least one action by an IRS employee have yet to be processed as of Jan. 28, according to taxpayer advocate data obtained by The Post. 

The newspaper noted that that number includes: over four million amended returns; over four million that had errors with stimulus payments that required them to be suspended; and close to six million pieces of correspondence that could not yet have tax returns completed before the IRS and taxpayers resolved issues.

Congressional tax-writing committees were reportedly given figures related to the backlog of 2020 tax returns from the IRS’ taxpayer advocate service, The Post reported.

Three people who spoke with The Post said that the IRS has been faced with several challenges, including responding to concerns about providing taxpayer relief and addressing the backlog of tax returns in addition to challenges of hiring and onboarding new employees.

A spokesperson for the IRS referred The Hill to a letter that IRS Commissioner Chuck Rettig sent members of Congress this week, in which he outlined some of the challenges that the agency is facing. 

“The IRS pursued significant actions during the 2021 filing season to address the return and correspondence inventory. But, because the IRS lacked the resources it needed to reduce inventory to a healthy level, we are entering the filing season with a significant inventory of unprocessed returns and correspondence,” Rettig wrote to lawmakers. 

A lack of funding needed to maintain and train staff and a lack of “multi-year investment necessary to improve our technology and operating systems” are some of the specific challenges facing the IRS, Rettig noted.

Rettig also noted that the IRS has taken actions to reduce its tax return backlog, including implementing mandatory overtime and launching surge teams to tackle time-sensitive issues. 

“These steps are making a difference. Refunds for tax returns and amended tax returns in the inventory continue to flow out to taxpayers,” Rettig wrote. “At the same time, the IRS successfully opened the 2022 tax season two weeks earlier than the year before, clearing the way for 160 million tax returns to be processed in a timely manner. We are working hard to meet taxpayers’ continuing needs and provide relief or assistance whenever appropriate.”

The development comes just two months before the deadline for Americans to file their tax returns, assuming they do not file for an extension. The IRS last year extended its tax return filing deadline to May 17, citing the ongoing pandemic. 

Tags Internal Revenue Service IRS Tax returns

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