IRS will "absolutely" resolve backlog before end of the year, Commissioner Charles Rettig says
The IRS could wipe out its massive backlog of returns by the end of the year, IRS Commissioner Charles Rettig said Thursday. His optimistic prognosis comes as millions of people are still waiting for the overburdened agency to process returns from past tax filing seasons and send their refunds, even as the IRS entered a new tax filing season.
The IRS still had 23 million items in its backlog to get through heading into this year's tax filing season, as it struggled to overcome hurdles exacerbated by the coronavirus pandemic. Earlier this year, the Taxpayer Advocate wrote in her report the IRS was in a crisis. Treasury and IRS officials warned this could be the most challenging tax filing season for taxpayers and preparers to date.
Rettig appeared before the House Ways and Means committee Thursday for a hearing on the tax filing season. He said the agency will "absolutely" make it through the backlog before the end of 2022.
"If the world stays as it is as of today, we will be what we call healthy by the end of calendar year '22, and enter the '23 filing season with normal inventories — healthy through the eyes of the taxpayer," Rettig said.
The Treasury Department and IRS announced last week a plan to catch up on the pandemic-related backlog this year. The effort includes the hiring of 10,000 IRS employees over the next year, including 5,000 in the next few months. The IRS has also been granted more hiring authority, allowing the agency to get new employees in the door more quickly. Previously, the onboarding process took as many as six to eight months, Rettig said, but with their new abilities, employees could be onboarded in 30 to 35 days.
The agency already has an 800-person surge team of experienced IRS employees who since last month have been working through amended returns and other taxpayer correspondence in the backlog. Another 700-person surge team is also being assembled to help process original returns.
When the coronavirus pandemic hit in spring 2020, the IRS shut down its processing centers in the middle of tax filing season. While centers reopened in June, the agency was left with more than 23 million pieces of unopened mail to get through that July. The IRS is capable of opening 1 million to 1.5 million pieces of mail a week and had to fight through that backlog. The situation snowballed.
The IRS also had to fulfill additional responsibilities, such as delivering stimulus checks and advance tax child credit payments to millions of Americans during the pandemic. The agency has delivered more than $1.5 trillion in relief since the pandemic began.
But the major challenge the IRS continues to face in tax filing season, according to the agency, is paper returns — which involves the tedious process of physically entering the information into their systems.
"The issue for the Internal Revenue Service has always been paper, pre-pandemic and during the pandemic," Rettig said.
Heading into this year's tax filing season, the IRS has been encouraging everyone capable of filing returns electronically to do so, and emphasizing the importance of accuracy. The agency maintains those who file accurate returns electronically should receive refunds within 21 days.
For the 2022 tax filing season, the IRS has received more than 63 million individual tax returns through March 11 and has issued more than 45 million refunds totaling more than $151 billion. The tax filing season runs through Monday, April 18.
