IRS will finally finish processing last year’s tax return backlog this week
But more than twice as many returns filed in 2022 still await processing compared with a typical year at this point.
The individual returns that were filed last year without errors are all expected to be processed by the end of this week. Business paper returns filed in 2021 will follow shortly after.
“Completing the individual returns filed last year with no errors is a major milestone, but there is still work to do,” said IRS Commissioner Chuck Rettig in a statement.
There are millions of remaining tax returns to process that were filed this year. While the agency is behind compared with years prior to the pandemic, it is ahead of last year by about 1 million returns.
The IRS has been able to keep pace with electronically filed returns — processing them on average within eight to 21 days — but it takes longer to process the returns filed on paper. However, the agency has automated the correction of common mistakes made on paper tax returns, speeding up that process. Last filing season, an IRS tax examiner required roughly one hour to clear 70 returns. Now, that number has more than doubled to about 200.
The IRS is on pace to end 2022 without a backlog of original returns.
The Covid-19 pandemic created new challenges for the agency and brought on additional work, resulting in backlogs of returns in both 2021 and 2022.
The pandemic also made it harder for taxpayers to access in-person help at IRS Taxpayer Assistance Centers, many of which were shut down for months in 2020.
Meanwhile, Congress tasked the IRS with sending out billions of dollars in economic relief benefits like the stimulus payments and monthly enhanced child tax credit payments.