IRS Ended Tax Filing Season With Major News

( Tax season has ended, but the IRS is historically behind on processing returns.

According to a report that was released Wednesday by an independent watchdog, there are still 35 million business and individual tax returns that the IRS hasn’t processed yet.

The National Taxpayer Advocate’s office of the IRS is the agency that conducted the report. It revealed that almost all taxpayers filed their annual returns on time this year, with many even receiving a refund.

Even still, the IRS is left with a record number of tax returns that are still unprocessed. The advocacy office reports that that number is four times more now than it was at the end of the 2019 tax filing season.

Of those 35 million returns that are still unprocessed, 16.8 million paper returns are still waiting to be processed. Another 15.8 million were suspended during the processing process and are in need of further review. Another 2.7 million are amended returns that have to be processed still.

All of these outstanding returns have to be processed manually. The report says this means that an IRS employee will need to be involved in at least one step of the process before it can move to the next step.

Erin Collins, the head of the office, conducted the report. In it, she noted that the pandemic has brought many challenges to taxpayers and the IRS as well.

She wrote that the IRs’ “employees endured personal and professional challenges, which resulted in a historically high volume of unanswered telephone calls to its phone assistors and a historically high volume of unanswered telephone calls to its phone assistors and a historically low level of service.”

The reported added that:

“Millions of 2019 and 2020 paper returns were delayed and awaited processing, and tens of millions of returns awaited the atypical necessity of manual reviews — most still waiting for processing.

“The COVID-19 pandemic has strained the IRS’s customer service performance, and its ability to adequately assist taxpayers continues to be negatively affected.”

The three different rounds of stimulus checks that the IRS had to process added to all the responsibilities the agency already has. In total, the IRS issued roughly 475 million stimulus check payments for a total of $807 billion.

Separately, the IRS said it has already processed 136 million individual income tax returns. Those resulted in the IRS issuing 96 million refunds that totaled roughly $270 billion.

Earlier on Wednesday, Collins separately said:

“The IRS and its employees deserve tremendous credit for what they have accomplished under very difficult circumstances. But there is always room for improvement.”

Workers at the IRS are working mandatory overtime to try to process the returns that are remaining, Charles Rettig, the commissioner of the IRS, told the Senate Finance Committee recently.

Collins commented on what led to this huge backlog, saying:

“It was a perfect storm … we experienced historical highs and lows.”