If the IRS was a business and not part of the federal government, it would have already filed for bankruptcy and closed the doors. It would be gone!
The Covid Pandemic has shuttered many businesses since March of 2020. The Internal Revenue Service was so unprepared for such an event and is in a state of, well, literally disaster. As we came into the 2021 Tax Filing Season the IRS was still processing 2019 tax returns and opening mail from the Summer of 2020!
It was recently reported by Forbes that the IRS has over 30 million unprocessed information returns as of December 2020. The GAO reported that “As of December 2020, written correspondence from taxpayers requiring the IRS to review and respond totaled 4 million pieces, and unopened mail for the 2021 season had already started piling up, to the tune of 700,000 pieces as of late January.”
The number of tax returns processed by the IRS is DOWN 31% year to date under last year.
The #1 thing you can do to avoid IRS Problems, is avoid sending them paper! If you owe the IRS this year, I’m recommending that you pay your balance due by direct debit. DO NOT MAIL A CHECK.
Gregory J. Cook, EA, CPA
If your tax return is filed electronically, it is processed immediately. The Internal Revenue computer system is programed to send computer-generated notices 30 days afterwards if the payment has not posted. If you mail a paper check to pay the taxes, there is a very high likelihood that one of two things will happen; 1) your check may get lost or 2) the processing of your check will be delayed, as much as 180 days. That’s 6 months! And by then, that really smart computer will have sent your file to Collections.
The reason is simple. The behemoth computer system has no knowledge of what the Internal Revenue employees are doing. Neither does management by the way.