After months of updates about processing backlogs and lowered expectations, the Internal Revenue Service (IRS) finally has some good news for taxpayers who have been waiting endlessly for a refund. The agency is about to finish processing all 1040 tax returns.
Well, not all of them. Just the ones filed last year. But at least it’s progress.
In an update Tuesday, the agency said it was on track to complete its backlog of individual returns filed in 2021 by the end of this week, provided the return has no errors. As we’ve written in the past, the IRS began 2022 with millions of unprocessed paper returns due to a confluence of factors, including outdated technology, understaffing, and COVID-related office closures. Paper returns are cumbersome for the agency because—despite the fact that we’re living in the year 2022—human beings still need to input those returns by hand.
The situation has produced monstrous mountains of paper at IRS processing centers, along with increased calls for more funding to modernize its systems. According to the National Taxpayer Advocate, simple scanning technology could seriously speed things up by reducing the need for manual inputs.
Without funding from Congress, though, the IRS must continue doing some things the old-fashioned way. Today’s update at least indicates that things are heading in the right direction.
“As of June 10, the IRS had processed more than 4.5 million of the more than 4.7 million individual paper tax returns received in 2021,” the agency said. “The IRS has also successfully processed the vast majority of tax returns filed this year: More than 143 million returns have been processed overall, with almost 98 million refunds worth more than $298 billion being issued.”
For the better part of the last two years, social media platforms and message boards dedicated to IRS issues have been flooded with posts from taxpayers who say they’ve been waiting for tax refunds from last year or the year before, with many complaining that they have been unable to reach the agency by phone.
Today’s announcement will be welcome news for some, although it may not effectively mean much for taxpayers whose returns have been flagged for review due to errors or other irregularities. The good news is, the IRS has said it is speeding up that process, too. As of last week, 360,000 returns were awaiting corrections, compared to 8.9 million at this point last year.
According to the IRS, staffers will continue to work overtime to address the remaining unprocessed returns throughout the rest of this year. With luck, they’ll be finished before next April.