Understaffing and Backlogs Could Slow Down Your Tax Refund

April 10, 2022 Topic: IRS Region: North America Blog Brand: Politics Tags: 2022 TaxesTax RefundInternal Revenue ServiceHiring

Understaffing and Backlogs Could Slow Down Your Tax Refund

The IRS has only hired about 2,000 of the 5,000 workers it expected to hire, and still hopes to hire thousands more in 2023.

 

This year’s tax season is in the final stretch, but the Internal Revenue Service (IRS) has made little headway on its initiatives to cut down on its massive backlog and hire more workers.

According to Fox Business, IRS Commissioner Chuck Rettig told the Senate Finance Committee on Thursday that many taxpayers could see refund delays if nothing changes at the agency.

 

“The IRS is serving more people and entities in a global environment than ever before while handling new and bigger responsibilities,” he said. “At the same time, we have experienced delays in updating our IT systems, which means the IRS and taxpayers must continue to use certain paper-based processes.”

Hiring Spree Falters

The long-understaffed agency was expected to hire 5,000 workers in the coming weeks and fill another 5,000 positions next year, but that has not gone according to plan.

“The agency has so far onboarded just 2,000 of the 10,000 new workers it intended to hire,” according to Fox.

As reported previously by CBS News, the IRS “might struggle to lure workers based on pay alone,” noting that annual starting salaries for the IRS range from about $23,000 to $47,000, and non-full-time workers can expect around $15 an hour.

Furthermore, the agency is still trying to clear more than 20 million remaining unprocessed tax returns and correspondence from previous years.

“There are roughly 2.7 million paper returns from 2021 and 2.3 million returns from 2022 that have not yet been processed,” Fox said. “By comparison, the IRS usually enters the tax-filing season with fewer than 1 million remaining items to address.”

However, Rettig did confirm that roughly 90 percent of the “error resolution” backlog has been cleared.

“We're trending in the right direction,” he said.

Still Time to Claim 2018 Refunds

The IRS has also issued notice that nearly $1.5 billion remains in unclaimed income tax refunds for an estimated 1.5 million taxpayers who did not file a 2018 return. But these taxpayers need to take action quickly because they only have until the tax day deadline on April 18 to collect the money.

“The IRS wants to help people who are due refunds but haven’t filed their 2018 tax returns yet,” Rettig said in a release. “But people need to act quickly. By law, there’s only a three-year window to claim these refunds, which closes with this year’s April tax deadline. We want to help people get these refunds, but they need to file a 2018 tax return before this critical deadline.”

Despite the ongoing struggles at the IRS, the agency so far this year has processed more than 89 million returns and issued more than 63 million refunds worth about $204 billion. The average refund amount is $3,352.

Ethen Kim Lieser is a Washington state-based Finance 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.

Image: Reuters.