IRS begins 2022 tax-filing season with backlog ‘crisis’ that could delay refunds



The Internal Revenue Service will kick off the 2022 tax-filing season in a state of crisis as it grapples with a backlog of millions of unprocessed returns from one of the “most challenging years” for the agency.

That’s according to a new report from National Taxpayer Advocate Erin Collins, who warned that taxpayers could face “even longer delays” for their tax refunds than they did last year as the IRS rushes to address a backlog of returns.

“There is no way to sugarcoat the year 2021 in tax administration: From the perspective of tens of millions of taxpayers, it was horrendous,” Collins, who leads the independent watchdog organization within the IRS, wrote in the report. She warned the processing delays could be “as bad, and potentially worse” this year.

The difficulty this season – which officially begins Jan. 24 – stems from a massive pileup of unprocessed returns accrued during the pandemic: Collins estimated the IRS had a backlog of more than 8.6 million unprocessed individual income tax returns and 2.8 million business returns as of mid-December due to the pandemic and other related disruptions. It also had close to 5 million pieces of unanswered mail.

By comparison, the IRS usually enters the tax-filing season with fewer than 1 million remaining items to address.

There are several reasons for the delays. The IRS was grappling with office closures as well as the herculean task of delivering millions of stimulus checks in 2020 and 2021, all while trying to adapt to major changes to the tax code in the middle of the filing season. The agency is also grossly understaffed; it has 20,000 fewer staff than it did in 2010, and its budget is roughly $11.4 billion – 20% less than it was in 2010, when adjusted for inflation, according to the Congressional Budget Office…Read more>>

Source:-foxbusiness 

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