Pandemic led to IRS backlog of eight million paper enterprise tax returns

The Covid-19 pandemic induced a backlog of practically eight million paper-filed enterprise tax returns on the IRS in 2020, in line with a report issued Tuesday by a U.S. Treasury Division watchdog.

That represents a 3,230% enhance relative to the tip of 2019, when the IRS had about 239,000 paper returns ready to be processed, in line with the report, printed by the Treasury Inspector Normal for Tax Administration.

The delays are largely a results of “unprecedented and drastic actions” the IRS took to guard workers and taxpayers throughout the Covid-19 pandemic, the report stated.

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These measures included shutting Tax Processing Facilities and different workplaces nationwide in early April and lengthening the federal income-tax submitting deadline to July 15.

Backlogs primarily affected employment tax returns, practically 5.5 million of which had been awaiting processing on the finish of 2020, in line with the watchdog report. Delays additionally affected enterprise tax returns for partnerships, firms, estates and presents, fiduciaries and tax-exempt organizations, for instance.

The enterprise tax return backlog has declined considerably, to 291,000 as of July 2021, in line with a letter written by Kenneth Corbin, commissioner of the IRS wage and funding division, in response to the report.

The IRS expanded its telework operations, employed about 3,500 new workers in processing operations and transshipped greater than 2.Three million returns, varieties and paperwork between processing facilities to steadiness inventories and stop bottlenecks, he stated.

“We took, and proceed to take, progressive actions to deal with the buildup of stock whereas concurrently defending the well being and security of our workers and the taxpaying public,” Corbin wrote Aug. 11.

The company additionally provided incentive pay and additional time for workers, in line with the report.

Nevertheless, the IRS continues to have issue hiring sufficient workers to proceed processing tax-year 2020 returns, the report confirmed. The company had met 63% of its recruitment aim for processing operations as of July, Corbin stated.

“The shortcoming of the IRS to rent enough workers will have an effect on taxpayers awaiting refunds or which have claimed pandemic enterprise credit,” the report stated.