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Processing Delays and Backlogs at the IRS

The pandemic shutdown in 2020, staffing shortages, budget limitations, and numerous tax law changes have converged to cause a snowball effect on the IRS’s ability to process returns in a timely manner. Both taxpayers and tax professionals have been heavily impacted for the last couple of years, and it has become so bad going into this 2022 tax season that we wanted to let you know what’s happening and what you can do to help. 

Just a few things that are happening (or not happening) at the IRS:

  • Refunds for any return that is not e-filed or that requires human handling will be greatly delayed. In some business cases, it has been over a year from filing to refund.
  • Millions of amended and paper returns have not been processed into the IRS system. It’s as if they haven’t received them.
  • IRS is sending out millions of incorrect notices, liens, and levies due to the unprocessed returns, which often require professional responses.
  • The Taxpayer Advocate Service, which is where you can go if you can’t get what you need from the IRS, is tremendously backed up with requests.
  • When we call the IRS, the hold time is measured in hours, not minutes, and often we experience a “courtesy disconnect,” the IRS’s term for a dropped call.

The only good news is that the IRS staff is so lean that the odds of getting audited are pretty much the lowest they have ever been. 

Our professional associations are actively lobbying and sending letters to Congress and the IRS in an attempt to smooth out some of these issues, including implementing penalty waivers, discontinuing automated compliance notices, and suggesting other actions favorable to the taxpayer.  

What can you do to help? Two things:

  • Be patient with your tax professionals. Our work takes a lot longer when the IRS is not operating efficiently.
  • If you are experiencing hardship due to the IRS, write your Representatives and Senators in Congress. This seems to be the only thing that gets their attention. If we write, it’s not as big of an impact as if you write.

Thank you for understanding and knowing that we’re always doing the best we can for you. 

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