The IRS released some updated data on ongoing processing delays in its latest operations update. This includes the following key data points:
As of October 28, 2022, the IRS had 4.4 million unprocessed individual returns received this year. These include tax year 2021 returns and late filed prior year returns.
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Of these, 1.9 million returns require error correction or other special handling, and 2.5 million are paper returns waiting to be reviewed and processed.
Tax return processing does not typically require the IRS to correspond with taxpayers, but it does require special handling by an IRS employee so, in these instances, it is taking the IRS more than 21 days to issue any related refund.
If we [the IRS] need more information or need you to verify you sent the tax return, we will send you a letter. The resolution of these issues could take more than 120 days depending on how quickly and accurately you respond, and how quickly we can complete the processing of your return.
The IRS have said they are opening taxpayer sent mail within their normal timeframes, but processing these responses is taking longer than usual due to resource restrictions. The exact timeframe varies depending on the type of issue. So expect that the IRS will keep processing returns will into the 2023 tax season.
The IRS had 1.1 million unprocessed Forms 1040-X (amended returns) and are processing these returns in the order received and the current timeframe can be more than 20 weeks
To date, the IRS has issued over 11.9 million refunds or existing tax liability offsets relating to unemployment insurance tax exclusion rebates, totaling $14.6 billion.
The IRS also had 2.5 million unprocessed Forms 941 (Employer’s Quarterly Federal Tax Returns).
Not surprisingly, the following are where taxpayers are seeing the most significant service delays:
- Live phone support
- Processing tax returns filed on paper
- Answering mail from taxpayers
- Reviewing tax returns, even for returns filed electronically
The only advice I can give is to be patient. The IRS continues to onboard new staff under the IRA act, recently announced 4,000 more staff were recently hired to fill critical customer service representative positions.