IRS Processing Delays
The National Taxpayer Advocate (NTA) identified four sources of IRS delays:
What is the result of these sources of IRS delays? As of May 1, 2021, more than two weeks before this year’s filing deadline, the IRS had:
- Pandemic-related issues;
- Last-minute changes to the tax laws;
- Reduced staffing; and
- Outdated systems and technology.
- 8.8 million returns in its Error Resolution System (ERS);
- 15.8 million unprocessed 2019 and 2020 paper-filed returns; and
- 5.5 million returns with processing errors or suspected identity theft issues.
That’s a total of just over 30 million returns requiring manual processing. To provide some context, as of the same date, the IRS had successfully processed 116 million returns. So, out of roughly 146 million returns filed by May 1, 2021, 20% of all returns filed still had not been successfully processed.
Checking the IRS’s “Where’s my refund?” tool is not very helpful because if a return is delayed for one of the aforementioned reasons, the tool will not provide any additional information.
Taxpayers and their professional advisors who want to call the IRS for answers are left similarly frustrated. The NTA has reported that the IRS’s customer service representatives only answered about 2% of the roughly 70 million phone calls coming into their 1040 telephone lines.
What can tax professionals do to help their clients through the IRS’s delays? Very little. Of the backlog problems facing the IRS, there is only one that really has any action that tax professionals can take: suspected identity theft. Tax professionals can have their clients obtain Identity Protection Personal Identification Numbers (IP PINs). Doing so will limit the chances that their clients’ income tax returns will be selected for suspected identity theft. Other than that, all we can do is wait for the IRS to catch up.
IP PINs can be obtained through the IRS at www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin.
If we have been unsuccessful at resolving your issue with the IRS, please see the above article regarding setting up your own IRS account. Many taxpayer's have had more luck resolving issues through their own accounts than tax professionals working on their behalf.