The agency may be overloaded, but for those submitting returns, it's status quo.
It's tax filing time - which means accountants, tax professionals and taxpayers are busy submitting returns to the IRS.
But you may have heard about the IRS backlog of returns it still needs to process from 2020. As the agency is accepting 2021 tax returns from filers, it's under mountains of unprocessed returns - mainly paper - from the previous tax season. The backlog is said to be 24 million tax returns, delayed 10 months or more. There is no one single reason for the holdup - but a shrinking IRS workforce, with many going into the private sector - and outdated equipment (some reports say that scanning machines that couldn't tell if envelopes had checks in them or not) are said to be factors.
As a result of being millions of tax returns behind, plans to close an IRS processing facility in Austin, Texas, have been cancelled. Other strategies are underway to address the glut of 2020 returns, such as outsourcing.
Should you file for 2021, then?
Yes. File.
Even though you need your 2020 Adjusted Gross Income, or AGI, to e-file successfully for 2021, that doesn't mean you avoid filing altogether.
You should still file, according to the IRS. If you are still waiting on your 2020 return, enter "$0" (zero dollars) for last year's AGI for your 2021 return.
"For those who used a non-filer tool in 2021 to register for an advance child tax credit or third economic impact payment in 2021, they should enter $1 as their prior year AGI," the IRS said.
But you were one of the lucky ones and have your 2020 return from last year, enter that AGI number.
Adding to the workload for IRS processors may feel counterintuitive, but it's the right thing to do.
Kari Kerby
Susan Shalhoub
Susan Shalhoub