How the IRS Backlog Will Impact Your Return | USTaxAid

Diane Kennedy's Blog

How the IRS Backlog Will Impact Your Return

Written by Diane Kennedy, CPA on February 18, 2022

Let’s start with the bad news. The IRS began the 2022 tax season (2021 tax returns) with over 10 million returns that still need to be processed. Contrast that to the 2020 tax season (2019 tax returns). They began with a backlog of 0.

They have lost 17% of staff in the past decade and during that same time frame, the work load has increased by 20%. Plus the pandemic has created unusual work like making the economic stimulus payments and caused the shutdown of some of the IRS facilities.

At this moment, the IRS officials can’t even provide a time frame for when returns will be processed or refunds will be sent out. All they have said is don’t call the IRS and don’t file a second return.

Also, if you do mail them paperwork, don’t send it return receipt requested. They won’t accept it. If you want proof of receipt, it’s best to use another service such as FedEx or DHL. NOTE: I have recommended that you mail using return receipt requested for years now. Now that the IRS won’t accept service any more, that option is out.

The IRS is continuing to send out erroneous notices. For example, the IRS may have received your payment or even issued you a direct deposit refund and yet will send out a notice saying that they have not received your return.

If that happens to you, ask your tax provider to provide Form 9325. This form is created by the IRS to tax filers (via tax software companies). It shows that an efiled return has been received by the IRS.

Currently over 200 Congress members (Democrats and Republicans) have joined with taxpayer advocacy groups to put pressure on the IRS to more quickly process paperwork and provide penalty relief. 

The IRS does have some online support available to check if you owe back taxes and allows you to make online payments. You can also view the stimulus check amounts and advance child tax payments that the IRS shows you have received. However, there are reports that the online records are not always up to date either.

And finally, the new facial recognition software program that the IRS was requiring has been suspended. There was a lot of pushback from taxpayers and taxpayer groups about the program.

The IRS is going through a lot of changes right now. If you get a notice from the IRS, don’t panic. Most of the time there isn’t anything you need to do. However, if you do receive an “intent to levy” notice, indicating they are about to sweep your bank accounts, you do need to take action.

You will need to call them and talk to an agent. This could take several days of calling to actually get through. A faster alternative is to hire a tax professional to call using our tax hotline number. It still can take us over 2 hours on hold, though, so the fees for this service are going up. 

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