23 Jun 2022 IRS to Process all Forms 1040 Originally Filed in 2021 by End of Week
Authored by RSM US LLP, June 23, 2022
The Internal Revenue Service announced that it is on track to complete processing of originally filed and error-free paper Forms 1040 received in 2021, by the end of this week. Shortly thereafter, the IRS will continue to process business paper returns filed in 2021, and the remaining individual tax returns filed in 2021 containing processing issues that may require additional information.
Pandemic-related issues and staffing shortages have strained IRS resources, with 2022 beginning inventory consisting of a higher-than-normal amount of filed paper tax returns and correspondence from 2021.
To address the remaining unprocessed inventory, the agency has implemented unprecedented efforts, including staff working overtime, creating teams solely focused on processing aged inventory, and direct hiring of new workers and contractors. In addition, the IRS has implemented new technology where an IRS tax examiner can correct 180 to 240 returns per hour compared to the prior average of 70 returns last filing season.
IRS Commissioner Chuck Rettig stated that the IRS is “focused on doing everything possible to expedite processing of these tax returns, and we continue to add more people to this effort as our hiring efforts continue this summer.” Increased agency funding is also hopeful as “long-term and consistent funding for the agency is critical to ensuring the IRS is prepared for future tax seasons”. This will aid the agency in adding “more employees to process tax returns and answer phones as well as help improve technology and ensure fair enforcement of the tax laws”, Rettig said.
Despite facing these challenges, the IRS processed most of the individual paper returns received in 2021—more than 4.5 million of the greater than 4.7 million as of June 10. Many tax returns filed in 2022 have also been processed, with approximately 98 million refunds generated from the more than 143 million returns processed. The IRS is encouraging taxpayers with extensions to file until Oct. 17, 2022, not to wait until the last minute.
Taxpayers should file sooner rather than later if they have not filed their 2021 tax returns yet. An error-free electronically filed return with direct deposit is typically processed in 21 days, but there could be potential delays when a return is filed close to a filing deadline or file paper returns.
DO YOU HAVE QUESTIONS OR WANT TO TALK?
Fill out the form below and we’ll contact you to discuss your specific situation.
This article was written by Evan Stone and originally appeared on 2022-06-23.
2022 RSM US LLP. All rights reserved.
The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Haynie & Company is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.