Millions of returns were not processed because IRS personnel were not on-premise during the coronavirus pandemic. But information about the problems was not given in a timely fashion to the public. For example, on December 31, the IRS website had an update dated December 1 that stated there were 7.1 million unprocessed individual and 2.3 million unprocessed business returns as of November 24 with some of those dated back to April 15.
The Advocate’s reports says the IRS should update the backlog information weekly, which should result in fewer calls from taxpayers.
Refunds continued to be delayed by IRS fraud detection filters. The report said for about 25 percent of the reports flagged for income verification, refunds took longer than 56 days. About 18 percent of returns marked for identity verification took longer than 120 days.
There was also a problem with millions of individuals not receiving some or all of the Economic Incentive payments to which they were entitled. Although the IRS agreed to fix some EIP problems that could be resolved by automation, the agency was unable to resolve many cases last year, meaning those individuals will have to wait until they file 2020 tax returns to receive payments.
Additionally, taxpayers received more than 20 million notices that had dates that had passed and in many cases, response or payment deadlines that had passed. The IRS used inserts with about 1.8 million notices to explain taxpayers would have additional time to respond but failed to include inserts with many other notices.