Overwhelmed IRS Braces for 2022 Tax Season

tax season

The pandemic has hit the IRS hard over the last couple of years. From budget cuts to staff shortages, the 2020 and 2021 backlog of returns means that the IRS will face a major uphill battle this tax season. According to the National Taxpayer Advocate’s report to Congress, there are massive processing issues happening. Erin M. Collins, a representative from the National Taxpayer Advocate, stated that she is “deeply concerned about the upcoming filing season…. Paper is the IRS’ Kryptonite, and the agency is still buried in it.”

With 6 million individual tax returns not yet processed and 2.3 million amended individual tax returns not process as recently as December, the IRS is struggling to keep up with its growing backlog. To put this in perspective, pre-pandemic backlogs were typically around 1 million individual tax returns to begin a new tax season. Now, Treasury officials are warning American taxpayers that the IRS is poised to face “enormous challenges” this tax season. One aspect of the problem lies in the fact that this is the second tax filing season amid the pandemic. In addition, the staff shortages have made the IRS ill-equipped to handle the influx of phone calls coming in from taxpayers.

As with any tax filing season, the most important thing to note are the important dates:

  • January 24th: the IRS begins to accept and process 2021 tax returns
  • April 18th: tax filing deadline (3 days after the typical April 15th deadline due to Emancipation Day)
  • April 19th: tax filing deadline for residents in Maine and Massachusetts, as Patriots’ Day is being celebrated on April 18th

With backlogs from last year’s tax filing season fresh on many taxpayer’s minds, Americans who are hoping to avoid delays this year should be proactive. That means filing the 2021 tax returns online and doing so as soon as they can. As a result, the IRS claims that these taxpayers are less likely to see a delay in both the processing and receiving of refunds. In addition, taxpayers who do file electronically are encouraged to choose direct deposit. The IRS expects that these people will have no issues receiving their refunds with a 21 day window.

As always, the sooner that taxpayers gather their tax information the smoother filing will be. Reaching out to accountants now, rather than in April, will help to streamline the process and making filing as efficient as possible. At Ellrich, Neal, Smith & Stohlman, P.A., our tax services include the preparation of federal and state income tax returns for all business, not-for-profit organizations, and personal entities including individuals, estates, trusts, partnerships and corporations as well as business and individual tax planning and consulting.

Our tax planning service goes far beyond filing a tax return. We assist new businesses with basic ownership options and tax consequences and guide growing businesses through year-end planning and projections. We offer a broad range of consulting services that include evaluating material transactions, mergers and acquisitions, international taxation strategies, and estate and trust planning. Contact our Orlando, Miami, or Palm Beach Gardens offices today to learn more.