The backlogged Internal Revenue Service is still struggling to process nearly 24 million tax returns from last year. That figure is far higher than previously reported by the tax agency, according to the Washington Post.
The Daily Mail reported that the 24 million returns are “more than twice as much as the 11.4 million unprocessed business and individual returns that the tax agency reported in mid-December 2021.”
What this means is that tax refunds related to the backlog have been held up for ten months or more, frustrating taxpayers amid another hectic, pandemic-affected tax season.
Be Aware of Special Step
For taxpayers who still have last year’s tax return pending, they also must know about a special step they need to take to avoid an IRS rejection for this year’s electronic filing.
“When filing digitally, you validate your return with the previous year’s adjusted gross income (AGI). Typically, your tax filing software has these details if you’re a returning customer. Otherwise, you can manually enter the numbers. However, the validation process changes with a pending 2020 return,” writes personal finance expert Kate Dore at CNBC.
“If last year’s return is still in limbo, you’ll need to enter $0 for your 2020 AGI when filing online,” she continues, citing what National Taxpayer Advocate Erin Collins said during a recent hearing with the House Ways and Means Oversight Subcommittee.
During the hearing, Collins said “that way you can file electronically, and you don’t have to file a paper return. We need to get that message out to taxpayers.”
That’s a critical message this tax season as the IRS has urged all Americans to file electronically with direct deposit set up to avoid painfully long refund delays. For most taxpayers with error-free returns, they should be able to get their hands on their refunds within twenty-one days of filing, the tax agency has confirmed.
Daunting Tax Season
Still, the IRS is confronting an uphill climb once again this tax season. In a recent letter, Collins wrote that “the coronavirus pandemic has created enormous challenges for taxpayers, tax professionals, and the IRS.”
She also admitted that she is “deeply concerned about the upcoming filing season.” The millions of unprocessed tax returns are from the “most challenging year taxpayers and tax professionals have ever experienced,” she continued.
However, despite the massive backlog and staffing shortages, it appears that the IRS is off to a solid start. It has confirmed that it already has issued more than 4 million tax refunds, with the average refund coming in at roughly $2,200.
“The IRS is off to a strong start to this year’s tax season,” the agency said in a statement.
Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.