The IRS is Backed Up
The IRS is Behind
Mail received by the IRS is significantly delayed.
IRS offices are beginning to re-open through June.
The IRS is preparing to open electronic filing of Amended Returns.
The IRS is now sending out payment notices with incorrect due dates.
It’s no surprise to anyone that many businesses and organizations have had their work grind to a halt during the COVID-19 pandemic. We have all been dealing with delayed timelines and the challenges that come with working from home.
Now imagine a government organization doing tax work for the entire American population (processing returns, gathering taxpayer information, audits, levies, liens, etc) and facing these same challenges of health concerns, office closures and limited staff working in not ideal (or productive) environments.
That’s where the IRS is right now. They’re behind on their work.
How Behind Are They?
It’s hard to guess how behind the IRS is. They say they are still processing returns and payments made electronically. The IRS claims that, “As of April 3, the IRS received over 97.4 million tax returns and issued over $213 billion in refunds.” That’s good news! E-filed returns haven’t seen many delays, thanks to the ability for them to be easily reviewed and processed remotely.
However, we know the IRS has closed helplines and basically battened down the hatches. With offices shuttered, they’ve seen a pile-up of mail. According to a CNN article from mid-April, the IRS is holding the unopened mail in tractor-trailers because there’s nowhere else for it to go! Yikes!
Most taxpayers won’t be affected by this, but any paper or amended returns that have been mailed are stuck in these piles. With no guidance on how long it will take the IRS to process these returns, it is safe to assume their usual timeline of up to 10 weeks will be delayed.
Hope on the Horizon
But it isn’t all doom and gloom! There’s some good news rolling in.
First of all, IRS offices have slowly begun to open- offices in Kentucky, Texas, and Utah opened on June 1, and offices in Georgia, Tennessee, Missouri, and Michigan opened on June 15. IRS offices in Indiana, Ohio, California, Puerto Rico, and Oregon will open on June 29. This means call centers and major processing centers will start to get to work again.
Also, after years and years of waiting, taxpayers will finally be able to file amended returns electronically! Whaaat?
That’s right; according to the IRS, they will start accepting 1040-X forms electronically later this summer. This option will only be available for 2019 returns and will significantly increase processing times and reduce errors and delays. EXCITING STUFF!
What Does This Mean for Me?
This back-up means you should, as best you can, file returns and/or make payments to the IRS electronically. If you must mail in correspondence, returns and/or payments to the IRS, you may have to wait for processing, but will not likely suffer any penalties or interest for them being late. The IRS processes returns and payments using the date of your postmark.
As tax offices re-open, be aware that they will be sending out a backlog of automated notices. These were printed a few months ago and have been waiting for someone to send them out. Because these notices were printed before the shutdown, they’ve got incorrect due dates and other outdated information printed on them. The notice SHOULD come with an insert that explains the extended payment due date.
Do your best to get everything in promptly and then be patient. The people that work at the IRS are like you and me; struggling, frazzled, and unmoored as we navigate to a new normal. They are dealing with uncertainty, as well as new tasks related to pandemic assistance and the added pressure of doing it right. Though they’ve made mistakes and there have been problems, the IRS is doing what they can to put people first, as we all should.