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Advocate: IRS Buried in Paper

 The Internal Revenue Service still has millions of unprocessed tax returns from 2021, according to Erin M. Collins, national taxpayer advocate. In her annual report to Congress, Collins noted this month, “processing delays led to a cascade of customer service problems.”

"While my report focuses primarily on the problems of 2021, I am deeply concerned about the upcoming filing season," Collins wrote.

According to the report, the IRS had the following unprocessed returns at the end of December: 6 million unprocessed 1040s, 2.3 million 1040-Xs, 2 million 941 and 941-Xs and about 5 million pieces of taxpayer correspondences. Some of the submissions date to April and many taxpayers are still waiting for refunds.

Perhaps surprisingly, one recommended method for reducing delays  was using scanning technology to read returns. Moreover, some taxpayers are prevented from efiing because they need to file forms that have not been programmed for the IRS systems to receive electronically.

The report also asked for customer callback technology to help reduce the hold volumes. “Customer callback will not enable the IRS to handle the 250 million calls that went unanswered,” according to the report. But it noted it could reduce the volumes stemming from customers making multiple calls. The report says 250 million calls went unanswered.

The IRS’ lack of routine communications with taxpayers via email also frustrates taxpayers and leads to increased telephone calls and correspondence.

The IRS should also create a weekly dashboard to provide specific information about delays. The webpage, IRS Operations During COVID-19: Mission-critical functions continue, that provides certain high-level information. The report commented, “However, it does not provide detailed information on processing backlogs, saying for amended returns only that ‘the current timeframe can be more than 20 weeks.’”

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