IRS chief Chuck Rettig expects tax return backlog to clear up by end of 2022
IRS launched massive hiring spree last week to work through tax return backlog
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The IRS is wading through an unprecedented backlog of unprocessed tax returns, but the head of the tax-collecting agency told Congress on Thursday that he expects the government to clear out the pileup by the end of the year.
While testifying before the House Ways and Means Committee, IRS Commissioner Chuck Rettig told lawmakers that he foresees the IRS clearing the backlog of tax returns "absolutely before December."
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"As of today, barring any unforeseen circumstances, if the world stays as it is today, we will be what we call ‘healthy’ by the end of calendar year 2022, and enter the 2023 filing season with normal inventories," he said.
WASHINGTON, DC - JUNE 08: Internal Revenue Service (IRS) Commissioner Charles Rettig testifies during a Senate Finance Committee hearing June 8, 2021 on Capitol Hill in Washington, D.C. (Photo by Tom Williams-Pool/Getty Images / Getty Images)
That's in part because the IRS planned a hiring spree this tax season to process 20 million returns from previous years. The agency announced last week that it intended to hire 10,000 new workers in the next year, with plans to onboard at least half of those employees within the next few months.
By comparison, the IRS usually enters the tax-filing season with fewer than 1 million remaining items to address.
Rettig described the plan as an "all hands on deck" approach to ensuring the backlog is back at pre-pandemic levels by the next year.
He has previously noted that the agency is grossly understaffed; before the hiring spree, it had 20,000 fewer staff than it did in 2010, and its budget is roughly $11.4 billion – 20% less than it was in 2010, when adjusted for inflation, according to the Congressional Budget Office.
The Internal Revenue Service (IRS) headquarters in Washington, D.C., U.S., on Friday, Feb. 25, 2022. The IRS is expanding its capacity to process tax returns following criticisms from members of Congress about taxpayers waiting months to get their re (Photographer: Al Drago/Bloomberg via Getty Images / Getty Images)
On top of that, more than 20% of the IRS customer service workforce has been unable to work for pandemic-related health reasons over the last two years.
There are fresh challenges facing the IRS this year: Taxpayers will have to reflect the monthly child tax credit payments and the stimulus checks they received in 2021 on their returns, further complicating matters and increasing the likelihood of errors and delays in processing returns.
Taxpayers "should pay extra attention if they received Economic Impact Payments or an advance Child Tax Credit in 2021," Rettig wrote in a recent op-ed for Yahoo News. "The IRS has sent out more than 150 million information letters this year. This will help assure information is reported accurately."
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Experts have urged taxpayers to file their tax returns as soon as possible, noting that individuals do not need previous returns in order to submit their 2021 returns. Americans are encouraged to file electronically with direct deposit in order to avoid potential delays and receive their return within 21 days.
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The tax-filing season will end on April 18 this year for most individuals, rather than the usual deadline of April 15, because that's when Emancipation Day will be observed in Washington, D.C.
Taxpayers can request an extension online by filling out Form 4868 using the IRS’ "Free File" tool. They need to submit the form by April 18, or print the form and mail it to the IRS address for their state, making sure it's postmarked by April 18.