Tax Refunds Delayed As Filing Deadline Draws Near

CBS Dallas/Fort Worth

May 16, 2021

The revised tax-filing deadline is May 17. In a typical year, that could mean a tax refund within a few weeks, if not sooner. This is not a typical year. COVID and the policies to help fight its economic implications have put the Internal Revenue Service (IRS) far behind in its processing of tax returns. The backlog is likely to grow as filers rush to meet the upcoming deadline. And that could mean potential delays for tax refunds, particularly for those who file paper returns.

The IRS came into the current tax season with millions of pending tax returns from 2019 and before. As with most office workers, many IRS employees have had to do their jobs from home for much of the pandemic. Paper returns, which sat in trailers awaiting processing, were inaccessible. As of March 5, the number of remaining returns received prior to 2021 totaled 2.6 million. A few weeks later that number had dropped to 2 million.

While the backlog of earlier-year tax returns fell, the backlog for 2020 returns rose. A recent blog post from National Taxpayer Advocate Erin M. Collins revealed the numbers. As of early April, over 8 million individual returns had been placed in “suspense status,” pending review and manual processing. (Suspending returns does not tend to happen during a typical tax year.) Another 5.3 paper returns from the last two years required manual processing, along with 4.7 million returns with errors and possible fraud issues and 11 million business and other returns. That 29 million total has increased to 31 million as the deadline approaches.

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