I-Team 8

IRS: Pandemic, old technology, understaffing leave millions of 2019 tax returns untouched

INDIANAPOLIS (WISH) — The backlog of federal income-tax returns was created in part by the coronavirus pandemic shutdown in spring 2020.

Cory Haskett of Madison County, located northeast of Indianapolis, is one of the millions of U.S. taxpayers who has not received a 2019 federal tax refund from the IRS. He is waiting on close to $6,000 from the federal government. His return was delayed by a signature issue on the electronic filing. He corrected the issue last summer and has had little luck getting answers from the IRS on when he can expect his return.

“It is always something, like you will receive something in the mail within like six to eight weeks, and that has been months and months back now,” Haskett said. 

Greg Geisler, a professor at Indiana University Kelley School of Business, says the IRS will be lucky to get through its backlog by the fall. “This is highly unusual. My best guess is when they shut down for the pandemic, they did not answer the mail for three months and now taxpayers are paying the price.” 

The professor says the agency is understaffed and using outdated technology. Adding to the backlog is the pressure to get stimulus checks out the door.   

“Their backs are against the wall, and they need to fight their way out of it, and taxpayers are the ones suffering,” Geisler said. 

Charles Rettig, IRS commissioner, told a congressional committee that the IRS needs additional workers to process the 24 million returns making up the backlog, which he hopes to clear up by the end of the summer. But, he says, there are a lot of returns with errors and not enough staff staff to help taxpayers.    

“We have 5 million returns in process that we have looked at. We have reached out to taxpayers either for additional forms, computation, consistency issues, identity-theft issues, verification for the taxpayer, everything that you would expect we would do,” Rettig told the congressional committee. 

Rettig says the IRS receives close to 1.5 million letters, emails and phone calls every week.

Taxpayers who not received their 2019 returns most likely have not received stimulus money.

U.S. Rep. Jackie Walorski, a Republican serving parts of northern Indiana, asked the commissioner how soon he expects to get those people caught up. Rettig said, “We are sensitive to we happen to be the financial vehicle to get, you know, benefits out to folks that really need them and we are working really hard.”

For anyone who filed a paper return in 2020, the IRS likely has even looked at it or even entered the filing into its system; technology or lack thereof is adding to the delay as 16% of agency’s technology is out of date. Some IRS technology dates from the 1980s.