November 30, 2022

Volume XII, Number 334

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November 29, 2022

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November 28, 2022

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IRS Announces Progress on Processing Tax Returns

The phrase “it’s in the mail” is sometimes an excuse for one’s delinquency in filing tax returns. However, that is not necessarily the case for taxpayers who have submitted their individual tax returns during the COVID-19 pandemic. The impact of the pandemic on the Internal Revenue Service’s (IRS) ability to open mail and process returns has been well-documented. In March 2022, the IRS announced that it was hiring more than 5,000 positions in its service processing centers in three states.

On August 29, 2022, the IRS provided an update on the status of its return processing efforts. The update provides, in part:

The IRS is opening mail within normal timeframes and all paper and electronic individual returns received prior to January 2022 have been processed if the return had no errors or did not require further review.

As of August 19, 2022, we had 8.7 million unprocessed individual returns received in calendar year 2022. These include tax year 2021 returns and late filed tax year 2020 and prior returns. Of these, 1.7 million returns require error correction or other special handling, and 7 million are paper returns waiting to be reviewed and processed. This work does not typically require us to correspond with taxpayers but does require special handling by an IRS employee so, in these instances, it is taking the IRS more than 21 days to issue any related refund and in some cases this work could take more than 120 days. If a correction is made to any Recovery Rebate Credit, Child Tax Credit, Earned Income Tax Credit or Additional Child Tax Credit claimed on the return, the IRS will send taxpayers an explanation. Taxpayers are encouraged to continue to check Tax Season Refund Frequently Asked Questions.

Further information is provided, including how long taxpayers may have to wait and what actions they can take (i.e., checking Where’s My Refund? or viewing their account).

Practice Point: The IRS is making headway in processing returns and, with increased funding on the horizon, it appears that things may be getting back to normal—at least back to pre-pandemic levels of productivity. However, taxpayers should always take the appropriate steps to ensure that their returns are timely filed and that they have proof of when and what was filed with the IRS. This includes making copies of paper filed returns, using IRS-approved mail delivery services such as the US Postal Service and certain private delivery services and retaining electronic receipts for electronically filed returns. Because processing times for mailed returns are still slow, taxpayers should consider the potential advantages to filing timely but in paper through the mail for purposes of the period of limitations on assessment of additional tax in Internal Revenue Code Section 6501.

© 2022 McDermott Will & EmeryNational Law Review, Volume XII, Number 242
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About this Author

Andrew R. Roberson tax attorney McDermott Will. Andy handles tax cases in Federal court, United States Tax Court
Partner

Andrew R. Roberson is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  Andy specializes in tax controversy and litigation matters, and has been involved in over 30 matters at all levels of the Federal court system, including the United States Tax Court, several US Courts of Appeal and the Supreme Court. 

Andy also represents clients, including participants in the CAP program, before the Internal Revenue Service Examination Division and Appeals Office, and has been successful in settling...

312-984-2732
Kevin Spencer, McDermott Will & Emery LLP , Tax Litigation Attorney
Partner

Kevin Spencer focuses his practice on tax controversy issues. Kevin represents clients in complicated tax disputes in court and before the Internal Revenue Service (IRS) at the IRS Appeals and Examination divisions.

 

In addition to his tax controversy practice, Kevin has broad experience advising clients on various tax issues, including tax accounting, employment and reasonable compensation, civil and criminal tax penalties, IRS procedures, reportable transactions and tax shelters, renewable energy, state and local tax, and private client matters. After earning his Master of...

202-756-8203
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