WASHINGTON, D.C., USA — Between tax returns, COVID-related changes, and a new round of stimulus checks, the Internal Revenue Service (IRS) is faced with a tax season unlike any other. While the IRS is working to get money out as quickly as possible, there is one group of tax filers who could be waiting months -- those who file paper returns.
The problem dates to last year when the coronavirus forced many IRS employees to work offsite. Electronic returns (e-file) were still able to be processed with minimal delays, but paper returns require a manual review that needs to be done on-site.
A report, earlier this month, from the U.S. Government Accountability Office (GAO), found the IRS still had millions of paper returns from last year that it had not yet processed. As of December 2020, the IRS reported 13.1 million unprocessed returns, with 92% of them on paper.
- 5.5 million individual returns
- 7.6 million business returns
“Due to, you know, the COVID issues, which of course started back in roughly March of last year, there's a huge backlog at IRS on paper returns,” Jim Hooker, a Jackson Hewitt franchisee said.
Hooker said the backlog includes not just current tax returns, but prior year filings and amendments. Both Hooker and the IRS are encouraging people to file electronically, if they can, to expedite the process.
“If you mail it in, to be honest, we don't even know the timeframe of that anymore,” Hooker said. “It used to be a four to six-week window, but with the backlog from last year, you know, I honestly have no idea how long this will take if you mail it in.”
In the meantime, the GAO has made seven recommendations to the IRS to address the backlog:
- The Commissioner of Internal Revenue should revise IRS's estimates for resolving its backlog of work from the 2020 filing season.
- The Commissioner of Internal Revenue should track business refund processing, such as through IRS's weekly performance tracking.
- The Commissioner of Internal Revenue should conduct an assessment to comprehensively identify barriers taxpayers face to e-filing business-related returns
- The Commissioner of Internal Revenue should, after completing the barrier assessment in recommendation 3, determine what actions IRS could take to address the barriers and implement those actions, as feasible.
- The Commissioner of Internal Revenue should identify and consider implementing actions to transition staff currently on weather and safety leave to active work status, as appropriate. This could include reassigning staff to other tasks that can be performed remotely.
- The Commissioner of Internal Revenue should identify and document all risks to the 2021 filing season; conduct a comprehensive risk assessment, including determining the likelihood of these risks occurring and potential impact of these risks on IRS's ability to carry out its mission-essential functions; and identify options to respond to each identified risk.
- The Commissioner of Internal Revenue should, after completing the comprehensive risk assessment in recommendation 6, monitor risks, and communicate IRS's plans to manage risks, and provide status updates to stakeholders.
