Menu
Tax Notes logo

IRS Hiring Gap Complicates Second Pandemic Filing Season

Posted on May 10, 2021

Thousands of unfilled IRS jobs combined with pandemic-related processing center closures left the tax agency with 12 times the normal number of paper-filed returns carried over from the previous year into 2021.

At the midpoint (March 5) of the 2021 filing season, the IRS had more than 31,000 boxes containing an estimated 4.7 million documents that need to be refiled or retired to a federal records center, the Treasury Inspector General for Tax Administration reported in its mid-filing-season IRS performance audit released May 7.

Unopened mail surged from 17,508 items in the week ending December 25, 2020, to 1.1 million items by March 20, TIGTA found. Individual and business cases regarding refund status and tax law questions remain in IRS accounts management inventory, which dates back to April 13, 2020.

Meanwhile, taxpayers calling various IRS toll-free helplines received a 27.3 percent level of service at the filing season’s midpoint, with 4.4 million calls answered by operators after an average 18-minute wait, TIGTA found. Another 7.6 million calls were answered by automated IRS services.

“We remain concerned about the IRS’s continued challenges in hiring sufficient staff needed to work backlog inventory and process Tax Year 2020 tax returns at the same time,” the TIGTA audit said. It also reported that 9 percent of the IRS’s submission processing workforce wasn’t working, and 4,434 staff positions were waiting to be filled, as of March 9.

“The inability of the IRS to hire sufficient staff could further affect taxpayers awaiting refunds and additional [recovery rebate credits] claimed on Tax Year 2020 returns,” according to TIGTA.

Backlogs > Work

The IRS as of April 30 processed 110.2 million individual tax returns out of an expected 160.9 million returns through calendar year 2021. That amounts to 2.5 percent less than the 113 million processed by May 1, 2020.

The filing season’s delayed start — about two weeks later than usual, on February 12 — and the IRS’s decision to postpone the filing deadline to May 17 further confounded agency operations. TIGTA noted that even though the IRS’s processing centers have reopened, social distancing and other contact-limiting restrictions continue to hamper operations.

TIGTA included combined, comparative midseason 2020 and 2021 filing statistics showing steep declines in the numbers of individual returns received and refunds issued in 2021. Paper returns received by March 5 were down 43.8 percent compared with last year, while total refunds issued dropped 31.6 percent.

The IRS explained that it’s balancing the backlog of 2020 work against the need to process returns received this year. Tax examiners are being assigned to work either current- or past-year returns, rather than a mix of both, in an effort to speed the processing of new filings, the IRS said.

“The backlog of returns, correspondence, and other types of work resulting from the pandemic has and will continue to have a significant impact on the associated taxpayers,” TIGTA said.

Printer Error

While the IRS’s work continues to pile up, TIGTA found some surprising obstacles.

More than 7.4 million returns were still stuck in the IRS’s error resolution function as of March 20, when that number amounted to only 162,150 a few months before.

And in IRS submission processing for the same period, 42 percent of 164 copiers, printers, and similar devices in the function were unusable, while others were broken but still functioning.

“The lack of working printers and copiers affects many different areas of the IRS but has an especially significant effect on the Return and Income Verification Services functions,” the TIGTA audit said.

IRS employees told the inspector general that many devices were nonfunctional simply from being out of toner ink, or their waste receptacles were full.

Copy RID