Because of staff shortages and backlogs, the IRS has warned that tax refunds may take longer than expected.
It’s almost time to call it a wrap on the tax filing season of 2022, but IRS Commissioner Chuck Rettig cautioned on Thursday that refunds for many taxpayers could be delayed because of a lack of workers at the agency and a large backlog of processing returns.
Tax payments may be delayed for some taxpayers this year because of the COVID-19 outbreak and the numerous tax adjustments contained in congressional relief measures, according to Rettig’s testimony before the Senate Finance Committee.
More people and organizations are being served by the IRS in a worldwide environment than ever before, Rettig said. At the same time, the IRS and taxpayers must continue to employ paper-based processes because of delays in updating their IT systems.
Only 2,000 of the 10,000 new employees that the IRS had planned to hire have joined the agency so far, despite the fact that it needs to process 20 million old tax returns this tax season.
About 2.7 million 2021 paper returns and 2.3 million 2022 paper returns are still awaiting processing. In contrast, the IRS normally has fewer than 1 million outstanding items when tax season rolls around. However, Rettig added that the IRS had cleared 90 percent of the “error resolution” backlog by the end of the month.
As he put it, “We’re on the right track.”
Over 89 million tax forms have been completed and over 63 million refunds totaling a total of $204 billion have been distributed as of April 1. It’s possible that by the April 18th deadline, the average payment will have increased to $3,352 from last year’s $2,800 average.
It would be more difficult for the IRS to complete returns in 2021 since taxpayers would be required to include on their returns the monthly child tax credit payments and stimulus checks they get in that year.
Rettig has previously remarked that the agency is understaffed; before the hiring frenzy, it had 20,000 fewer personnel than it did in 2010, and its budget is around $11.4 billion—20 percent less than it was in 2010, when adjusted for inflation, according to the Congressional Budget Office.
In addition, over 20% of the IRS’s customer support staff has been unable to work for the past two years due to health issues associated with the pandemic.
The IRS estimates that taxpayers who successfully file their returns electronically and choose direct deposit will receive their refunds in as little as 21 days. The IRS’ Where’s My Refund service allows you to keep tabs on the progress of your tax refund within 24 hours after filing.
Due to the observance of Emancipation Day in Washington, D.C., this year’s tax-filing season will close on April 18 rather than the customary April 15 due date.