IRS To Complete Original Tax Returns Filed in 2021
The IRS recently announced that processing of originally filed Form 1040 individual tax returns without errors received during 2021 will be completed by the end of this week, and business paper returns filed in 2021 will follow shortly after.
As of June 10, the IRS had processed more than 4.5 million of the more than 4.7 million individual paper tax returns received in 2021. The IRS has also processed the vast majority of tax returns filed this year: More than 143 million returns have been processed overall, with almost 98 million refunds worth more than $298 billion being issued. The IRS said it continues to work on the few remaining 2021 individual tax returns that have processing issues or require additional information from the taxpayer.
Due to issues related to the pandemic and staffing limitations, the IRS began 2022 with a larger than usual inventory of paper tax returns and correspondence filed during 2021. To date, more than twice as many returns await processing compared to a typical year at this point in the calendar year, although the IRS has worked through almost a million more returns to date than it had at this time last year. A greater percentage of this year's inventory awaiting processing is comprised of original returns which, generally, take less time to process than amended returns.
To work to address the unprocessed inventory by the end of this year, the IRS has taken steps to accelerate processing while maintaining accuracy. This effort includes significant, ongoing overtime for staff throughout 2022, creating special teams of employees focused solely on processing aged inventory and expediting hiring of thousands of new workers and contractors.
The IRS said that it has also improved the process for taxpayers whose paper and electronically filed returns were suspended during processing for manual review and correction, referred to as error resolution. Last filing season, an IRS tax examiner could correct an average of 70 tax returns with errors per hour. Thanks to new technology implemented this filing season, 180 to 240 returns can now be corrected per hour. As of June 12, 2021, there were 8.9 million tax returns in error resolution. As of June 10, 2022, there were 360,000 returns awaiting correction.
Additional details on processing and other operations are available on a special page on the IRS website.