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According to a report released Tuesday by the US Treasury Department watchdog, the Covid pandemic delayed nearly 8 million paper tax returns to the IRS in 2020.
This is an increase of 3,230% from the end of 2019, when the IRS had about 239,000 paper returns awaiting processing, according to the report released by the Inspector General of the Treasury for Tax Administration.
The report says the delay is largely the result of “unprecedented and drastic actions” the IRS has taken to protect employees and taxpayers during the COVID-19 pandemic.
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These measures included closing tax processing centers and other offices nationwide in early April and extending the federal income tax filing deadline to July 15.
According to the monitoring report, the backlog mainly affected employment income tax returns, of which around 5.5 million were awaiting processing at the end of 2020. For example, the delays also affected tax returns companies for partnerships, corporations, estates and donations, fiduciary and tax. exempt organizations.
The backlog of corporate income tax returns has shrunk considerably, to 291,000 in July 2021, according to a letter written by Kenneth Corbyn, commissioner of the IRS’s Wages and Investments Division, in response to the report.
He said the IRS had expanded its telecommuting operations, hired about 3,500 new employees in processing operations, and transhipped more than 2.3 million returns, forms and documents between processing centers to balance inventory and avoid bottlenecks.
“We have taken and continue to take innovative steps to combat inventory build-up while protecting the health and safety of our employees and the taxpayer public,” Corbyn wrote on Aug. 11.
According to the report, the agency also offered incentive pay and overtime to employees.
However, the IRS is struggling to hire enough employees to continue processing 2020 tax year returns, as noted. Corbyn said the agency hit 63% of its recruitment target for job processing in July.
“The IRS’s inability to hire the right employees will impact taxpayers awaiting reimbursement or who have claimed corporate credits in the event of a pandemic,” the report said.