Patience will be necessary as the IRS works its way through a massive backlog.

The IRS National Taxpayer Advocate this week issued its Annual Report to Congress, warning that the agency faces a massive backlog in processing 2020 tax returns and issuing refunds. The report states that the IRS had around 6 million unprocessed individual tax returns and around 5 million pieces of unopened mail from taxpayers as of late December. Millions of taxpayers have not received refunds more than nine months after filing. The advocate warns that this problem will be compounded when the IRS starts to accept 2021 tax returns later this month.

There are several factors behind these delays. The workload at the IRS has ballooned since the start of the pandemic, including processing and issuing hundreds of millions of stimulus payments as well as Child Tax Credits totaling over $93 billion. The agency has also not been immune from workers contracting Covid-19, a factor that has led to lowered staffing levels during this critical time.

So, what does all this mean for you Unfortunately, it means you should prepare yourself for potentially extensive delays. It will take the IRS time to clear its backlog and process 2021 returns, especially paper filings, and longer to send refunds or resolve issues. Your partner in success, BPM will continue to work with the IRS to help speed up the process where possible, but patience will above all be your most valuable asset this tax season. Should you have any lingering concerns, please follow up with your BPM team as soon as possible so we can help you solve any challenges this development might create for your situation.

Headshot of Tony Gales.

Related Insights