INDIANAPOLIS— A historically high number of taxpayers have still not received their tax refunds, the National Taxpayer Advocate announced today in its mid-year report to Congress.
It’s a problem WRTV Investigates has been tracking more for more than a year—Indiana taxpayers having trouble filing their tax returns and receiving their 2019 and 2020 tax refunds.
The Taxpayer Advocate Service, an independent organization within the IRS that helps taxpayers and protects taxpayer rights, found at the conclusion of the filing season the IRS faced a backlog of over 35 million individual and business income tax returns that require manual processing.
That means an IRS employee needs to take some sort of action before a return can advance to the next stage in the processing pipeline.
The backlog includes about 16.8 million paper tax returns waiting to be processed; about 15.8 million returns suspended during processing that require further review; and about 2.7 million amended returns awaiting processing, the taxpayer advocate found.
The backlog resulted largely from the pandemic-related evacuation order that restricted employee access to IRS facilities, said the advocate.
“For taxpayers who can afford to wait, the best advice is to be patient and give the IRS time to work through its processing backlog,” National Taxpayer Advocate Erin Collins wrote. “But particularly for low-income taxpayers and small businesses operating on the margin, refund delays can impose significant financial hardships.”
The IRS faced difficulties performing its duties due to the COVID-19 pandemic and also faced added responsibilities with three rounds of stimulus payments.
Indiana taxpayers have also expressed concerns to WRTV Investigates that they’ve been unable to get through to the IRS on the phone.
The IRS received a record volume of telephone calls this tax filing season, but only 7% of callers reached an IRS representative on the accounts management lines, the report said.
On the “1040” line, the most frequently called IRS toll-free number, taxpayers placed about 85 million calls, and only 3% reached an IRS representative.
IRS employees could not keep pace with this massive volume of calls, resulting in the “poorest service ever,” according to the taxpayer advocate.
“When so few callers can get through to a telephone assistor, problems remain unsolved and taxpayer frustration mounts,” Collins wrote.
In its response, the IRS acknowledged issues involving customer service and completion of tax returns and offered a plan to make improvements.
“The IRS’s move toward a more modern system, which brings a number of IRS systems under one large umbrella, will allow more access to taxpayer information to each IRS function, thereby providing the IRS enhanced capabilities in helping taxpayers resolve their outstanding tax issues,” read the IRS response. “Although this is a significant undertaking, and full implementation is still years in the future, it is encouraging that the IRS is closer to making this improved system a reality to improve tax administration and taxpayer service.”
During the 2021 tax filing season, the IRS processed 136 million individual income tax returns and issued 96 million refunds totaling about $270 billion.
“The IRS and its employees deserve tremendous credit for what they have accomplished under very difficult circumstances,” Collins wrote, “but there is always room for improvement.”
What you should do, according to the IRS:
If you filed electronically and received an acknowledgement, you do not need to take any further action other than promptly responding to any requests for information.
If you filed on paper, check Where’s my refund? If it tells you we have received your return or are processing or reviewing it, we are processing your return, but it may be under review. We’re working hard to get through the backlog. Please don’t file a second tax return or contact the IRS about the status of your return.