Internal Revenue Service

IRS expects to clear 2021 tax filing backlog this week

The Internal Revenue Service announced on Tuesday that it was on track to process all error-free tax returns it received in 2021, a major milestone for the agency as it navigates an unprecedented backlog of nearly 8 million returns .

While the IRS has said it expects to eliminate the backlog by the end of the week, problems remain for the agency, which still has millions of tax returns from the 2022 filing season. that she has to deal with. So far this year, the IRS has processed more than 143 million returns, providing approximately $298 billion in refunds to taxpayers.

TAX SEASON 2022: WHERE AMERICANS HAVE SEEN THE BIGGEST REFUNDS?

However, the agency has about twice as many 2022 tax returns as normal that need to be processed, a Treasury Department official told reporters on a call Tuesday, the result of employees’ attention to the more pressing backlog of 2021 returns. Those error-free paper returns will likely be processed by the end of this year, the person said.

Internal Revenue Service

The Internal Revenue Service (IRS) headquarters in Washington, DC, U.S., on Friday, February 25, 2022. (Photographer: Al Drago/Bloomberg via Getty Images/Getty Images)

This is partly because the IRS has planned a huge hiring spree during tax season to browse unprocessed returns from previous years. The agency said on Tuesday it had hired 1,5,000 new employees as part of a broader plan to onboard about 10,000 workers next year. On top of that, workers who process original returns have logged around half a million overtime hours this year, while some 2,000 staff have left other parts of the agency to focus on processing returns. .

“Business returns filed in 2021 will be completed shortly thereafter, and the IRS will continue to work quickly to resolve the few remaining individual returns from 2021 that contain errors,” IRS Commissioner Chuck Rettig said. in a press release.

The agency kicked off tax filing season with about 8 million unprocessed returns as of 2021; by comparison, the IRS typically enters tax filing season with less than a million items left to process.

IRS charles retig

Internal Revenue Service (IRS) Commissioner Charles Rettig testifies before the House Ways and Means Oversight Subcommittee on March 17, 2022 in Washington, DC. (Photo by Kevin Dietsch/Getty Images/Getty Images)

The pile of unprocessed returns stemmed from pandemic-related disruptions, including a shortage of workers, the Herculean task of administering millions of stimulus checks and adjusting to other tax changes in the various tax programs. COVID-19 relief, such as increased child tax credit payments.

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Rettig previously noted that the agency was severely understaffed; before the hiring wave, it had 20,000 fewer employees than in 2010 and its budget is about $11.4 billion, 20% less than in 2010, after adjusting for inflation, according to the Congressional Budget Office.

The IRS has set a goal of achieving “healthy” inventory levels by the end of 2022.

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