35 Million Unprocessed Tax Returns Due To IRS Delays

July 14, 2021

Dear Clients, Business Associates and Friends:

The various pandemic-era programs introduced by the federal government have increased the tax authority's workload and caused delays in the tax refund process.

The IRS has been under extreme pressure since the start of the pandemic, tasked with implementing a range of federal relief programs designed to support individuals, families and businesses affected by covid-19.

“The IRS and its employees deserve tremendous credit for what they have accomplished under very difficult circumstances, but there is always room for improvement.” Taxpayer Advocate Erin Collins wrote in her report. “This year, the IRS is dealing with an unprecedented number of returns requiring manual review, slowing the issuance of refunds,” Collins continued. “These processing backlogs matter greatly because most taxpayers overpay their tax during the year by way of wage withholding or estimated tax payments and are entitled to receive refunds when they file their returns. Moreover, the government uses the tax system to distribute other financial benefits.”

The 35 million pending returns account for 20 percent of the total returns submitted. And with the May 17 federal tax deadline almost two months in the past, the IRS is well beyond the 21-day processing time it typically strives for. Myriad reasons account for the delay.