As the 2021 filing season has come to an end, the IRS is still on a mission to hire more employees to combat the backlog of paper returns. Although this is the case, the IRS commissioner is still warning of delayed refunds and long wait times on the phone.
Paper Filing Continued This Season
While the IRS still tries to get through the giant pile of paper filed returns that are on backlog from 2020, they can expect a lot more paper returns to be added to that pile. According to the National Taxpayer Advocate Service, at least nine million people used paper forms to file their tax returns this year. The IRS has tried a multitude of things over the past few months to combat the paper workload such as creating a surge team and enforcing mandatory overtime. The efforts by the agency are paying off slightly, but they are still dealing with 6 million paper returns from last year, as well as the returns from this season that will continue to roll in.
Congress Split on More Funding
IRS Commissioner Charles Rettig projected that the IRS is still lacking roughly $100 million in resources, but talks in congress on whether funding for the agency should be increased keep going back and forth. Some members of Congress believe that giving the IRS more money is too simplistic of an answer. Other members stress that more funding must be part of the solution, citing the office closures and the lack of employment that the IRS dealt with during the pandemic.
Congress has already provided the IRS with $675 million in funding that was included in the 2022 Omnibus spending bill, which was the largest bump that the Agency has seen since 2001. The spending bill also requested an increase of 18% for the 2023 fiscal year and an additional $80 billion over the next 10 years for the President’s climate and social initiatives.
Wrap Up
Paper returns from the most recent filing season will continue to pile in, and delays of 6 months for a paper refund are expected. Making the transition to electronic filing may be easier than you think! Talk with your accountant and advisor to find out if this is the best decision for you. It could save a return from being delayed for months on end.