HomeSmall BusinessPandemic led to IRS backlog of 8 million paper business tax returns

Pandemic led to IRS backlog of 8 million paper business tax returns

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The Covid pandemic brought on a backlog of almost 8 million paper-filed enterprise tax returns on the IRS in 2020, in line with a report issued Tuesday by a U.S. Division of the Treasury watchdog.

That represents a 3,230% enhance relative to the tip of 2019, when the IRS had about 239,000 paper returns ready to be processed, in line with the report, printed by the Treasury Inspector Normal for Tax Administration.

The delays are largely a results of “unprecedented and drastic actions” the IRS took to guard staff and taxpayers through the Covid-19 pandemic, the report mentioned.

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These measures included shutting Tax Processing Facilities and different workplaces nationwide in early April and increasing the federal income-tax submitting deadline to July 15.

Backlogs primarily affected employment tax returns, almost 5.5 million of which have been awaiting processing on the finish of 2020, in line with the watchdog report. Delays additionally affected enterprise tax returns for partnerships, firms, estates and items, fiduciaries and tax-exempt organizations, for instance.

The enterprise tax return backlog has declined considerably, to 291,000 as of July 2021, in line with a letter written by Kenneth Corbin, commissioner of the IRS wage and funding division, in response to the report.

The IRS expanded its telework operations, employed about 3,500 new staff in processing operations and transshipped greater than 2.3 million returns, types and paperwork between processing facilities to steadiness inventories and forestall bottlenecks, he mentioned.

“We took, and proceed to take, modern actions to handle the buildup of stock whereas concurrently defending the well being and security of our staff and the taxpaying public,” Corbin wrote on Aug. 11.

The company additionally provided incentive pay and extra time for workers, in line with the report.

Nonetheless, the IRS continues to have issue hiring sufficient workers to proceed processing tax-year 2020 returns, in line with the report. The company had met 63% of its recruitment objective for processing operations as of July, Corbin mentioned.

“The shortcoming of the IRS to rent adequate workers will have an effect on taxpayers awaiting refunds or which have claimed pandemic enterprise credit,” the report mentioned.

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