Taxpayers Who Filed Paper Returns With the IRS May Have to Wait Up to Six Months for a Refund.

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  • Americans who filed their taxes on paper may have to wait six months to receive their refund.
  • That is according to testimony given at a House hearing by national taxpayer advocate Erin Collins.
  • Due to the IRS’s chronic understaffing and underfunding, a backlog of unprocessed tax returns has developed.
  • If you filed your taxes manually this year, you may be in for a spooky October surprise: Your refund check.

Refund checks will take approximately six months to arrive for paper filers this year, according to testimony from national taxpayer advocate Erin Collins at a House subcommittee hearing on Thursday.

Collins, the IRS’s watchdog, has been raising the alarm for months about the agency’s buried treasure of paper. Collins stated in her 2021 annual report to Congress that “paper is the IRS’s Kryptonite, and the agency is still buried in it.” According to Collins, the IRS held 5 million pieces of taxpayer correspondence as of late December 2021.

 

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It hasn’t improved significantly over the last four months. “Paper continues to be at the heart of the agency’s problems,” Collins testified Thursday before a House subcommittee on government operations. She noted that IRS employees carefully scrutinize paper forms and that they must first address the 2020 paper backlog.

According to tax examiner Shawn Gunn, the IRS struggles to find enough staples or carts to move around stacks of paper.

Last year, the IRS struggled to manage additional pandemic-related responsibilities such as administering stimulus checks and advance child tax credit payments, on top of chronic underfunding and understaffing. This has resulted in a record-breaking backlog of unprocessed tax returns. Collins estimated that the IRS had a backlog of 6 million unprocessed original individual tax returns and 2.3 million unprocessed amended returns as of the end of December.

IRS commissioner Chuck Rettig estimated during the April 21 hearing that the agency still needed to process 2.4 million paper tax returns filed in calendar year 2021. Rettig has stated repeatedly that the agency requires additional funding to carry out all of its responsibilities.

“We’re asking the IRS to boil the ocean,” Virginia Rep. Gerald Connolly said during a Congressional hearing on the IRS’s massive workload and resource constraints.

Treasury officials said this week that the agency may be on the verge of collapsing. “Today’s deadline represents a watershed moment in what has been the agency’s most difficult filing season in recent history,” Natasha Sarin, Treasury counselor for tax policy, wrote in a Monday blog post.

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These funding issues, and the resulting backlog, have far-reaching consequences. Certain taxpayers have been left waiting months for refunds. Previously, filers told Insider that the delay in receiving refund checks made it more difficult to afford groceries, childcare, and even their homes. Additionally, as the 2021 filing season winds down, some taxpayers are still awaiting checks from previous years.

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