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I.R.S. Faces Backlog, Delaying Tax Refunds for Millions of Americans

I.R.S. Faces Backlog, Delaying Tax Refunds for Millions of Americans
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I.R.S. Faces Backlog, Delaying Tax Refunds for Millions of Americans

I.R.S. Faces Backlog, Delaying Tax Refunds for Millions of Americans

Millions of tax returns are still awaiting processing by the Internal Revenue Service, which faced a much larger backlog than in the past.

This means that all refunds owed for these Americans have also been delayed. About 70 percent of the individual returns processed so far have been refunds due, with an average size of $ 2,827.

More than 35 million 2020 federal returns were waiting to be processed at the end of the filing season in mid-May – more than three times as many pending returns as at the end of the filing season of the year last, according to a report released Wednesday by an independent advocacy group within the Internal Revenue Service.

“For taxpayers who can afford to wait, the best advice is to be patient and give the IRS time to deal with their backlog,” said Erin M. Collins, the national taxpayer lawyer. , in his mid-year report to Congress. “But especially for low-income taxpayers and small businesses operating at the margin, late repayments can impose significant financial hardship.”

The IRS said in a statement that it has processed returns on an ongoing basis for current and previous years, including amended returns filed by taxpayers. As of June 18, it had fully processed nearly seven million individual tax returns since the end of tax season, and more than 15 million of the overdue returns are being processed, the agency said.

The report – which also included recommendations for the IRS and a series of goals the defender plans to pursue over the coming year – said the backlog was largely the result of an evacuation order. linked to the pandemic that limited employee access to IRS facilities. In 2019, before the start of the pandemic, the agency had a backlog of 7.4 million reports at the end of the filing season. Last year, that number rose to 10.7 million.

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The IRS not only had to perform its traditional functions, it also had to digest the tax legislation that was enacted during the 2021 reporting season, according to the report. Then there was the third round of stimulus payments, which the agency started sending in mid-March. In the past 15 months, the agency processed 475 million stimulus payments worth $ 807 billion.

The IRS processed 136 million personal income tax returns at the end of the reporting season and issued 96 million refunds totaling approximately $ 270 billion. The 35.3 million returns that were still pending at the end of the production season included individuals and businesses. The taxpayer’s attorney said these returns require some sort of manual assistance, meaning an employee needs to get involved before they can move on to the next step in the processing process.

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