IRS: Tax delays likely as IRS is in state of crisis

It has been reported by a watchdog that the IRS is in a state of crisis just weeks ahead of the 2022 season’s start.

IRS tax return form with stimulus check sitting on a black marble background with a pad of paper

A report was released to Congress Wednesday detailing serious issues for taxpayers.

The biggest issue is delays for processing both tax returns and refunds.

The problems mostly detailed 2021, but National Taxpayer Advocate Erin M. Collins said she had major concerns for 2022.

She explained that paper returns and checks do not work well for the IRS, and that the agency is still struggling with paper returns now.

IRS: Who gets the biggest tax refund?

Issues plaguing the IRS

Backlogs from late Dec.

  • 6 million unprocessed individual returns
  • 2.3 million amended individual returns
  • 2 million quarterly tax returns
  • 5 million pieces of correspondence with taxpayers

How much you need to earn to file taxes

Some of these are from as far back as April and many Americans are still waiting for their 2021 refunds in 2022.

Collins went on to explain that the IRS needs help to process returns, especially because many have COVID-19 relief funds with them.

Withholding refunds also puts Americans in vulnerable positions where they may not be able to get loans or mortgages they otherwise could.

What documents will the IRS send me for taxes?

Why are delays happening with refunds from the IRS?

The IRS had poor telephone service as well as issues with the questions available through the Where’s My Refund Tool.

Collins report does not blame the IRS, but stated they were “playing the had they were dealt.”

The biggest reason for slow moving processing was the IRS being buried in paper returns.

Collins expressed concern over the processing of returns in 2022 stating they could be even worse than 2021 due to child tax credit payments.

She said this would happen for those who do not file electronically or properly report their child tax credit payments.