29 Million Tax Returns Are Being Held for Manual Processing

29 Million Tax Returns Are Being Held for Manual Processing

Jonathan Ernst

The Internal Revenue Service has a backlog of more than 29 million tax returns being held for manual processing, according to a blog post by National Taxpayer Advocate Erin Collins, who explains that the particular challenges of this tax season — including the added complexity caused by the Covid “stimulus checks” and rebate credits — made manual reconciliation of returns necessary and slowed down processing times. The backlog also includes 5.3 million paper returns for 2019 and 2020, 4.7 million individual returns with issues requiring responses from the filers and 11 million business and other returns.

The delayed returns have contributed to a more than 300% increase in the number of calls to IRS helplines, but as of April 10, only 2% of the roughly 70 million calls to the line for assistance with form 1040 have gotten through to a live person.

Collins says that the delays this year “have been largely unavoidable,” but calls for the IRS to be more transparent about the status of refunds. She adds that additional funding for the agency could also help improve service: “If the IRS had adequate funding for its computer systems, it could provide a robust online account with an ability to update the status of IRS reviews in real time and the anticipated payment date of the refund. Additionally, adequate resources would allow the IRS to upgrade its telephone systems to provide a customer callback feature, so taxpayers don’t have to endure long hold times and low levels of service.”