The IRS has begun processing paper tax returns, but it has a backlog of 11 million pieces of unopened mail, so taxpayers should expect delays in receiving their refunds.
“We estimate that we receive 1 million pieces of new mail each week. And think about all the weeks we were closed,” Sunita Lough, IRS deputy commissioner for services and enforcement, said June 18.
Lough provided the backlog estimate on a web conference sponsored by the New York University School of Professional Studies and CPA Academy, but she added that the IRS is opening 5 million pieces of mail per week.
Lough’s remarks came the same day the IRS updated its webpage on agency operations during the COVID-19 pandemic to warn of delays in paper return processing.
“We’re experiencing delays in processing paper tax returns due to limited staffing. If you already filed a paper return, we will process it in the order we received it,” the IRS said. “Do not file a second tax return or contact the IRS about the status of your return or your Economic Impact Payment.”
The webpage was also updated to note that the Taxpayer Advocate Service has reopened its toll-free centralized phone number, after only its local office numbers had been available. “We are also seeing high call volume to TAS offices resulting in delays in our response time,” it said.
In-person TAS offices remain closed, according to the webpage, and TAS is experiencing delays in working on cases because IRS services are limited.
The updates come as the IRS continues to reopen more of its facilities to employees who can’t work remotely. In an internal email to agency employees June 17, IRS Commissioner Charles Rettig said that all employees who can’t work from home and haven’t already been recalled will be asked to return to work July 13.
Rettig added that the agency’s “maximizing telework policy” will remain in effect to ensure social distancing at facilities.
The IRS has been slowly reopening since late April. At that time, it partially reopened critical agency workplaces to employees willing to voluntarily return and receive incentive pay.
Since then, more facilities have reopened on a non-voluntary basis. Three IRS processing locations in Texas, Utah, and Kentucky reopened the week of June 1, and the agency began reopening workplaces in Georgia, Tennessee, Missouri, and Michigan the week of June 15. Operations in Indiana, Ohio, California, Oregon, and Puerto Rico are expected to restart June 29.
The IRS reopening hasn’t been free of snags, however. It recently had to temporarily close workspaces in three Austin, Texas, facilities after employees tested positive for COVID-19. And in May, the IRS’s Kansas City, Missouri, campus had to close for almost a week after an employee was “presumed positive” for the virus.
Throughout it all, the National Treasury Employees Union has expressed concern for the health of IRS employees and about the availability of personal protective equipment such as face masks. It has pushed to ensure that worker recalls have been limited to allow for social distancing and that work stations are regularly sanitized.
‘Fiscal Cliff’ of Tax Payments
The union has also called for the tax return filing deadline to be extended to October 15 to allow time for IRS employees to safely process returns. The deadline for filing and payments was already extended to July 15, and Rettig last month rejected the idea of extending it another three months.
However, calls for extending some deadlines have continued. A coalition of 22 organizations warned in a June 18 letter that the bevy of tax payments due in July could create a “fiscal cliff” that would endanger economic recovery.
The coalition, which includes the National Taxpayers Union Foundation, Americans for Tax Reform, and other mostly conservative organizations, called on Treasury Secretary Steven Mnuchin to push several payment deadlines into 2021, including those for income tax payments, estimated tax payments, and excise tax payments.
According to the letter, if the deadlines aren’t extended, more than $1 trillion in tax payments would be transferred to the treasury at once. “This would represent an enormous financial burden at a time when many individuals and businesses are struggling to make ends meet due to the impacts of the COVID-19 crisis and the recent civil unrest,” the letter says.
Nathan J. Richman contributed to this article.