IRS Tax Return Processing Update

The IRS National Taxpayer Advocate Service recently released the mid-year report to Congress.  Here are a couple of the highlights of the report which you may find interesting:

  • During the 2021 tax filing season, the IRS processed 136 million individual income tax returns and issued 96 million refunds totaling about $270 billion. In addition to its traditional work, the IRS was directed by Congress to issue three rounds of stimulus payments and has made about 475 million payments worth $807 billion. 
  • Although most taxpayers successfully filed their returns and received their refunds, a historically high number did not. At the conclusion of the filing season, the IRS faced a backlog of over 35 million individual and business income tax returns that require manual processing.  The backlog includes about 16.8 million paper tax returns waiting to be processed; about 15.8 million returns suspended during processing that require further review; and about 2.7 million amended returns awaiting processing. The backlog resulted largely from the pandemic-related evacuation order that restricted employee access to IRS facilities.
  • Unfortunately, only approximately seven (7%) of callers to the IRS reached a telephone assistor on the accounts management lines.  On the most frequently called “1040” line – about 85 million calls, only three percent reached a telephone assistor. 

As a result of this report, the National Taxpayer Advocate has recommended proactive steps to work to improve services and communications with taxpayers, some of them being:

  • Improve online functionality for taxpayers.
  • Expanding the offering of customer callback technology to all IRS toll-free lines.
  • Addressing the limitations faced by taxpayers in e-filing of returns due to inability to submit supporting documentation, the ability to override software and expanding the types of returns which can be filed electronically.

While the National Taxpayer Advocate is required to submit an annual report, the IRS is required to respond within three-months.  All recommendations are submitted to the IRS Commission for review.  The report for 2020 contained 73 recommendations by the National Taxpayer Advocate Service of which the IRS has agreed to implement 48 or 66 percent of the recommendations. 

So, you may not have heard about the National Taxpayer Advocate Service before.  What is it?  What can it do?  How can it help?  The IRS provided the following explanation: 

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Your local taxpayer advocate’s number is in your local directory and at https://www.taxpayeradvocate.irs.gov/contact-us. You can also call TAS toll-free at 877-777-4778.  TAS can help if you need assistance in resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. Our service is free. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to https://www.taxpayeradvocate.irs.gov/.

Share

About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Fiduciary Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

Post a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Top