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November 10, 2021

NTA Blog: IRS Delays in Processing Amended Tax Returns Are Impacting TAS’s Ability to Assist Taxpayers

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In a previous blog, I highlighted the impact of the IRS’s processing delays and the resulting increase in cases on TAS’s ability to serve taxpayers. Today, I want to provide information on limitations TAS is facing in assisting individual and business taxpayers who have filed amended tax returns and are waiting for the IRS to process them. We know many individuals and businesses are frustrated by the delays, particularly those awaiting refunds.

As of October 30, 2021, the IRS had a backlog of over 2.7 million unprocessed amended returns. The IRS is processing these returns in the order received, and the current processing time posted on its operational page is more than 20 weeks. Our cases indicate that the processing time is considerably longer than 20 weeks, and as such, I have made the difficult decision to suspend accepting cases where the sole issue involves the processing of amended returns until the IRS is able to work through its backlog. We are also analyzing the upcoming filing season and expect to issue revised guidance for original filed returns.

Under our current procedures, TAS does not accept cases in which we cannot meaningfully expedite or improve case resolution for taxpayers. Amended returns fall into this category. Due to the broad impact of COVID-19, the IRS has faced significant challenges in all its return processing operations. Unfortunately, until the IRS processes a tax return, TAS cannot assist the taxpayer. For that reason, TAS will not accept new cases solely involving the processing of an individual or business amended return. TAS will continue to monitor IRS developments in amended return processing and will reevaluate this determination as the situation changes.

However, TAS will continue to accept new cases if the primary issue meets TAS case acceptance criteria per IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, and includes the processing of an individual or business amended return as a secondary issue.

We recognize that many taxpayers whose amended returns the IRS has not processed have been waiting for their refunds for months. Some are experiencing financial hardships and desperately need the funds. Most are confused, frustrated, and concerned that the delay may mean they did something wrong. The IRS reports that its Where’s My Amended Return tool indicates that a taxpayer’s amended return was received within three weeks of filing. Taxpayers can use the tool to track the status of their return. This tool is available on IRS.gov and can provide the status of amended returns for the current tax year and up to three prior tax years. One caveat – the tool cannot provide the status of amended returns with a foreign address, business tax amended returns, carryback applications, and amended returns processed by a specialized unit. If you are looking for updated information on IRS operations and backlogs, the IRS has created a dashboard that it is regularly updating.

Although TAS cannot assist in individual cases, we have been advocating within the IRS for systemic steps to reduce the processing backlog. On November 9, 2021, I issued a Taxpayer Advocate Directive (TAD) directing the IRS to complete processing all backlogged amended tax returns by December 29, 2021, or provide a detailed plan for completing processing the backlog. My TAD also directed the IRS to provide weekly updates to TAS on the progress in processing these returns and to post weekly updates on IRS.gov. Although the law authorizes the Commissioner or Deputy Commissioner to modify or rescind this order, the IRS must provide a written explanation, and then I would report on the issue in my Annual Report to Congress. TAS is continuing to work collaboratively with the IRS to expedite the processing of these returns.

Conclusion

I appreciate your patience and understanding as we work through these unprecedented circumstances. This is not a situation in which the IRS is unwilling to work with taxpayers or TAS. Rather, it has been caused by reduced staffing and the pandemic, which have created extraordinary challenges the IRS must overcome. We are aware of the problems taxpayers are experiencing, and we are continuing to advocate within the IRS to resolve them as quickly as possible.

 

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The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.

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