The Internal Revenue Service nonetheless must course of about 1 million paper tax returns after the coronavirus pandemic and subsequent keep-at-residence mandate upended operations, the company’s commissioner advised Congress throughout current Capitol Hill testimony.
As of Nov. 20, the IRS had processed about 162.4 million of the 168.6 million returns it had obtained. Throughout the identical time final 12 months, the company had processed virtually all of the returns it had obtained — about 155 million out of 155.4 million.
“We now have performed all that we are able to actually do,” IRS Commissioner Charles Rettig advised the Home Methods and Means Oversight Subcommittee, including: “On behalf of the Inner Income Service and each worker, for actually each American, we recognize the persistence and understanding. This isn’t an excuse, however I’ll say that our workers went by means of the identical precise factor as each different American throughout COVID with respect to well being and security considerations.”
Whereas the delay is probably inconvenient for Individuals nonetheless reeling financially from the disaster, the IRS is paying curiosity on the overdue refunds.
Taxpayers with a refund problem date between April 15 and June 30 earn an annual rate of interest of 5%, whereas refunds issued between July 1 and Sept. 30 earn an annual rate of interest of 3%, the IRS said. Prefer it costs curiosity when taxpayers don’t pay on time, the IRS additionally pays curiosity to taxpayers when the federal government points refunds too slowly.
The choice stems from a quirk within the tax code and in the way in which the submitting deadline was prolonged, in keeping with The Wall Street Journal.
In March, the Treasury Division prolonged the tax submitting deadline from April 15 to July 15 because of this of the virus-induced pandemic, which dragged the nation’s economic system into the worst downturn because the Nice Despair.
Throughout that point, the company continued to course of digital returns and issued refunds by way of direct deposits.
However when the IRS directed most of its workers to work remotely in mid-March, bringing a bunch of the company’s typical features to a grinding halt, it created a great backlog in paper returns. At one level, the overflow was so nice that the IRS needed to lease tractor-trailers and separate cupboard space to retailer the paperwork till staff may return and begin sorting by means of them, Nina Oldson, the director of the Heart for Taxpayer Rights, advised NPR.
Additional complicating operations was the distributions of tens of thousands and thousands of stimulus checks, the $1,200 money funds allotted with the passage of the March CARES Act. Rettig mentioned the IRS has contacted 4,000 homeless shelters to make sure that people staying there obtain the cash.
The IRS now has 3 million items of unopened mail, down from 5.3 million.