|Taxpayer advocate sees much larger backlog than IRS reported|
National Taxpayer Advocate Erin Collins expressed concern Wednesday in a midyear report to Congress about continuing delays by the IRS in processing tax returns filed on paper last year, pointing to far higher numbers than the IRS itself claimed just a day earlier. “When I released my Annual Report to Congress six months ago, I wrote that ‘Paper is the IRS’s Kryptonite, and the agency is still buried in it,’" Ms. Collins wrote. “Fast forward to this Objectives Report: It’s Groundhog Day.” She added: “At the end of May, the IRS had a larger backlog of paper tax returns than it did a year ago, and its pace of processing paper tax returns was slowing.” According to the report, at the end of May the agency had a backlog of 21.3m unprocessed paper tax returns, an increase of 1.3m over the same time last year. The agency fell short on its goal to bring on 5,473 new employees to process returns, with just 2,056 employees hired. Additionally, phone wait times increased to 29 minutes on average, compared with last year's 20-minute average wait time. . The IRS said Tuesday that it is set to finish processing unamended individual returns filed in 2021 this week—running about five months late. That means it is just about to start processing paper tax returns filed this year, a task that in a pre-pandemic year it would have started months ago. Ms. Collins said that to meet its goal, the IRS would need to process 500,000 returns a week, more than double what it has been doing. The report did also say that credit is due to agency leadership for the burden it carries with “an extraordinarily complicated tax code," antiquated technology, inadequate staffing and lingering challenges that have come from distributing COVID-19 related programs. “Despite these challenges, the tax system, as a whole, has held up well during the past two years," Ms. Collins wrote.