IRS, United States
In a recent report to Congress, National Taxpayer Advocate Erin Collins estimated the IRS had a backlog of more than 8.6 million unprocessed individual income tax returns and 2.8 million business returns as of mid-December.
The Internal Revenue Service (IRS) began to accept and process 2021 tax returns on January 24. This was seventeen days earlier than last year's late start of February 12. While the IRS has requested that Americans file their tax returns as quickly as possible, and to do so electronically, it has also warned that tax season could be filled with complications and delays for taxpayers.
New reports indicate the agency is now understaffed – with 20,000 fewer staff than it had in 2010, while its budget of $11.4 billion is 20 percent less than it was in 2010 (when adjusted for inflation). Moreover, upwards of 20 percent of the IRS customer service workforce has been unable to work due to pandemic-related health reasons for more than the past two years.
The agency is now telling Americans to expect delays if you're expecting a return.
"The IRS right now has unacceptable backlogs and the customer service that people are receiving is not what the American public deserves," White House press secretary Jen Psaki said on Friday. "The agency has not been equipped with the resources to adequately serve taxpayers in normal times, let alone during a pandemic."
In a recent report to Congress, National Taxpayer Advocate Erin Collins estimated the IRS had a backlog of more than 8.6 million unprocessed individual income tax returns and 2.8 million business returns as of mid-December. It also had close to five million pieces of unanswered mail, Fox Business.com reported.
The IRS has also warned that any resurgence of Covid-19 infections, including from a new variant, could make this filing season even more challenging than past years.
"The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don't face processing delays," IRS Commissioner Chuck Rettig said earlier this month.
Key among them is to avoid the paper tax return. In addition, Rettig has urged taxpayers to receive their refunds by direct deposit. Taxpayers can also choose to use mobile apps as long as a routing and account number are provided, while prepaid debit cards can also be sent to individuals.
Even as the IRS is now processing returns, some Americans may have to wait. That is because employers still have until January 31 to mail W-2 forms.
"Filing these documents timely helps employers avoid penalties and helps the IRS in fraud prevention," the IRS says on its website. "A 2015 law made it a permanent requirement that employers file copies of their Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by January 31."
According to the IRS, W-2 forms are normally due to workers by January 31. Forms 1099-MISC, Miscellaneous Information and Forms 1099-NEC, Nonemployee Compensation, are also due to taxpayers by January 31.
In addition to the filing season opening seventeen days earlier, tax filers will get a few extra days in April. The deadline to file 2021 income tax returns is Monday, April 18. The later date is the result of the Emancipation holiday in the District of Columbia falling on Friday, April 15. By law, Washington, D.C., holidays affect tax deadlines for everyone the same way federal holidays do.
In addition, taxpayers who live in Maine or Massachusetts have until April 19 to file because of a holiday celebrated in those states, Patriots' Day.
Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com.