IRS Backlogs

According to the Taxpayer Advocate Service, the Internal Revenue Service still had more than 35 million tax returns to process at the end of the 2020 filing season. About 23 million of those returns were filed by individuals who may be waiting on refunds or stimulus checks, according to the report that was released recently. The difficulties of working during the pandemic, combined with last-minute tax changes made by Congress aimed at providing relief for struggling Americans, created a challenging tax filing season for the IRS.

About 5 million returns are under review because there were discrepancies in how much the filers were claiming for their stimulus payments. Taxpayers who did not receive their stimulus checks, or are owed more than they originally received because they lost their jobs during the pandemic, are allowed to claim the difference on their tax returns. But when the amount they claim doesn’t match IRS records, the agency has to conduct manual reviews. In response to the report, the IRS has said it has made improvements to streamline hiring and continues to improve telephone services for taxpayers.