How the Continuing IRS Struggles with Workload Affect You

According to their own website, as of November 6, 2021, the IRS still had 6.9 million unprocessed individual returns to look at. In addition, they also had unprocessed amended returns (2.7 million), quarterly payroll tax returns (1.7 million), and amended quarterly payroll tax returns (392,000), among others, and the monthly processing of millions of advance Child Tax Credit payments.

Of course, it’s been a rough couple of years for everyone, including the IRS. Covid-19 shut down the entire country for several weeks and the IRS was no exception. They are still struggling to catch up from the backlog of work that started in March 2020. Add to that the agency’s involvement in numerous Covid relief initiatives since then, and you’ve got one very busy agency.

In the past two years, the IRS has had to deal with:

• Covid shutdown for several weeks & backlogged work because of it
• Gearing up to process and issuing multiple rounds of Economic Impact Payments (aka stimulus checks) to over 164 million taxpayers.
• Multiple changes in legislation regarding Paycheck Protection Program (PPP) Loans
• Multiple changes in legislation regarding Employee Retention Credits
• Gearing up to issue monthly advance Child Tax Credit payments to millions of taxpayers (covering 60 million children as of November 2021).

As a result, the IRS continues to struggle. Their own web page on “IRS Operations during Covid-19” states they are delayed in live phone support, processing paper returns, reviewing e-filed returns and answering other mail.

What are their response times like? The IRS website states it can take:

• 21 days to 120 days to issue a refund
• more than 20 weeks to process a 1040-X (amended individual return)
• more than 60 days to process a missing form or document sent by a taxpayer
• an average of 260 days to resolve identity theft cases
• longer than normal to answer a letter or notice response
• so long to process Third-Party Authorizations or Powers of Attorney, the IRS cannot even provide a timeframe

On top of all that telephone support exists, but there are extremely long wait times due to limited staffing and high call volume. And there is anecdotal evidence on social media that receiving refunds related to certain credits (such as the Employee Retention Credit) can take months from filing through actual receipt.

What does this mean for you? As we work to serve you in a timely manner where the IRS is concerned, just be aware that delays on the IRS side of things may mean it takes longer to get a refund or a response from the IRS. Obtaining information from the IRS as we follow up on certain filings (such as an S Corporation election, for example) will also take longer than it normally has.

In spite of the recent struggles of the IRS, we will continue to brave the hold times on the IRS telephone support system and follow up diligently on previous filings for you. Thank you for your patience during this time!