The IRS recently announced that it has nearly caught up on a key group of individual tax returns filed during 2021, and business paper returns filed in 2021 will follow soon.
Due to the pandemic, the IRS began 2022 with a larger than usual inventory of paper tax returns and correspondence filed during 2021. The few remaining 2021 individual tax returns left have processing issues or require additional information from the taxpayer. As of June 10, the IRS had processed over 4.5 million individual paper tax returns received in 2021.
To date, more than twice as many returns await processing compared to a typical year at this point in the calendar year, including quite a few original returns that, generally, take less time to process than amended returns. To address the unprocessed inventory by the end of this year, the IRS has taken aggressive steps including significant, ongoing overtime for staff throughout 2022, creating special teams of employees focused solely on processing aged inventory, and expediting the hiring of thousands of new workers and contractors. Additionally, the IRS has improved the process for taxpayers whose paper and electronically filed returns were suspended during processing for manual review and correction.
If you have not yet filed your 2021 tax returns this year, make sure to file your returns electronically and request any refunds be direct deposited to avoid delays. Additionally, file as soon as your returns are ready instead of waiting until the last minute before the October 17 deadline since filing sooner avoids potential delays and assists the larger ongoing IRS efforts to complete processing tax returns this year.