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The Covid pandemic brought on a backlog of almost 8 million paper-filed company tax returns at the IRS in 2020, according to a report issued Tuesday by a U.S. Office of the Treasury watchdog.
That represents a 3,230% boost relative to the end of 2019, when the IRS experienced about 239,000 paper returns waiting to be processed, in accordance to the report, posted by the Treasury Inspector Normal for Tax Administration.
The delays are largely a result of “unparalleled and drastic actions” the IRS took to safeguard workers and taxpayers in the course of the Covid-19 pandemic, the report mentioned.
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Those people steps included shutting Tax Processing Centers and other workplaces nationwide in early April and extending the federal cash flow-tax submitting deadline to July 15.
Backlogs generally influenced employment tax returns, almost 5.5 million of which have been awaiting processing at the close of 2020, according to the watchdog report. Delays also affected enterprise tax returns for partnerships, businesses, estates and presents, fiduciaries and tax-exempt companies, for instance.
The company tax return backlog has declined drastically, to 291,000 as of July 2021, according to a letter prepared by Kenneth Corbin, commissioner of the IRS wage and financial commitment division, in response to the report.
The IRS expanded its telework operations, employed about 3,500 new staff members in processing functions and transshipped far more than 2.3 million returns, kinds and files concerning processing facilities to equilibrium inventories and avoid bottlenecks, he mentioned.
“We took, and continue on to consider, innovative actions to deal with the accumulation of inventory although simultaneously protecting the overall health and safety of our workforce and the taxpaying public,” Corbin wrote on Aug. 11.
The company also offered incentive spend and overtime for staff members, in accordance to the report.
Having said that, the IRS proceeds to have trouble choosing ample staff members to proceed processing tax-12 months 2020 returns, in accordance to the report. The agency had fulfilled 63% of its recruitment aim for processing functions as of July, Corbin stated.
“The lack of ability of the IRS to retain the services of sufficient staff members will impact taxpayers awaiting refunds or that have claimed pandemic enterprise credits,” the report claimed.