The IRS Updates Taxpayers on the Backlog and Refund Delays

On July 1, 2021 Erin Collins, the Taxpayer Advocate, released her annual IRS report and provided another glimpse into the reasons for IRS refund delays. If you are still awaiting a refund, or any other resolution to a notice or correspondence, all we can do is wait.

The IRS has a current backlog of 35 million unprocessed individual and business tax returns that require manual processing. This is more than 5 times as many as were manually processed in 2019.

A little less than half of the backlog is paper tax returns awaiting processing, with most of the rest tax returns that were suspended during processing and requiring further review. Of the suspended returns, a large number were flagged because of discrepancies between recovery rebate credits claimed by taxpayers and what IRS records indicate the taxpayer qualifies for. 

Ms. Collins observed that all most taxpayers can do is wait for the backlog to clear! 

Adding to the backlog is a sharp increase in the number of returns flagged as suspicious: 3.7 million as of May 2021, compared with just 1.3 million in all of 2019, the report found.

IRS received more phone calls during the 2021 filing season alone than it had ever received in a full fiscal year, with over four times as many calls as in the prior filing season.

The IRS’s highest-volume phone line for individual income tax assistance clocked roughly 85 million calls, only 3 percent of which went through to a live IRS customer service representative.