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Don't Count on a Quick Tax Refund This Year, IRS Says

Treasury officials say the Internal Revenue Service will face 'enormous challenges' during this year’s tax filing season.
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The Treasury Department warned Monday of a “frustrating filing season” for taxpayers and tax preparers amid delays caused by the pandemic, budget cuts and federal stimulus measures.

Treasury officials said "the IRS is facing enormous challenges related to the pandemic and years of underfunding by Congress."

"These pressures will make for a frustrating filing season for taxpayers and tax preparers," officials said. "The historic gutting of the IRS will lead to a backlog of processing returns, the inability for the IRS to answer the phones and respond to taxpayer questions efficiently, and a lower quality of service."

IRS officials enter filing season with an unaddressed backlog of roughly 1 million returns, but this year the IRS will enter the filing season facing “several times” that, Treasury officials said.

The IRS closed last filing season with more than 35 million unprocessed returns, a fourfold increase from the last year before the pandemic.

The pandemic forced the closure of many in-person centers where paper forms are processed, while also affecting the IRS workforce.

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Budget cuts to the IRS prior to the pandemic led to a roughly 25% decline in the size of its staff. 

Treasury officials said the IRS workforce is the same size it was in 1970, despite the population growing by 60%.

The processing technology dates back to the 1960s and there are also fewer auditors than at any time since World War II. 

In the first half of 2021, there were fewer than 15,000 people to handle more than 240 million calls received, which translates to 1 person to handle every 16,000 calls received.

The Treasury Department said that tax filing season for 2021 tax returns will begin on Monday, January 24. Officials said there are no current plans to extend that deadline this year, urging taxpayers to file as early as possible.

Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year, Treasury officials said.