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The Covid-19 pandemic triggered a backlog of almost 8 million paper-submitted organization tax returns at the IRS in 2020, according to a report issued Tuesday by a U.S. Treasury Office watchdog.
That represents a 3,230% improve relative to the end of 2019, when the IRS had about 239,000 paper returns waiting around to be processed, according to the report, revealed by the Treasury Inspector Typical for Tax Administration.
The delays are mainly a outcome of “unprecedented and drastic steps” the IRS took to defend employees and taxpayers for the duration of the Covid-19 pandemic, the report reported.
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Those people steps integrated shutting Tax Processing Centers and other offices nationwide in early April and extending the federal revenue-tax filing deadline to July 15.
Backlogs mostly affected employment tax returns, approximately 5.5 million of which were awaiting processing at the end of 2020, in accordance to the watchdog report. Delays also affected enterprise tax returns for partnerships, corporations, estates and gifts, fiduciaries and tax-exempt businesses, for illustration.
The small business tax return backlog has declined substantially, to 291,000 as of July 2021, in accordance to a letter composed by Kenneth Corbin, commissioner of the IRS wage and investment division, in response to the report.
The IRS expanded its telework operations, hired about 3,500 new employees in processing operations and transshipped extra than 2.3 million returns, varieties and paperwork between processing facilities to harmony inventories and protect against bottlenecks, he reported.
“We took, and go on to take, modern actions to tackle the accumulation of inventory while at the same time defending the health and fitness and security of our workforce and the taxpaying community,” Corbin wrote Aug. 11.
The agency also supplied incentive pay back and overtime for workers, according to the report.
Having said that, the IRS carries on to have trouble employing sufficient personnel to continue processing tax-calendar year 2020 returns, the report confirmed. The company experienced fulfilled 63% of its recruitment goal for processing operations as of July, Corbin explained.
“The incapacity of the IRS to use sufficient personnel will have an effect on taxpayers awaiting refunds or that have claimed pandemic enterprise credits,” the report explained.