Massive backlogs obliterate solvency.
Hansen ’21 [Sarah; April 26; M.B.A. and M.A. in Economic Reporting at New York University, Breaking News Reporter for Forbes Magazine; Forbes, “10 Numbers That Sum Up The Dire Backlog At The IRS—And Its Impact On Taxpayers—As The May 17th Deadline Approaches,” https://www.forbes.com/sites/sarahhansen/2021/04/26/with-delayed-may-17-tax-filing-deadline-approaching-these-10-numbers-sum-up-the-dire-backlog-at-the-irs-and-its-impact-on-taxpayers/]
As the U.S. economy recovers from the disruption and damage of Covid-19, the Internal Revenue Service is struggling through a filing season unlike any other in history. The agency is under tremendous strain thanks to the enormous extra burden associated with sending out three rounds of stimulus checks; coping with other pandemic-related changes to the tax code (such as the belated exemption of the first $10,200 in 2020 unemployment benefits from federal tax and new tax credits for employers); staffing shortages; the challenges of remote work by its own employees and a leftover backlog of still unprocessed 2019 paper tax returns.
That’s not to mention the abnormally high number of 2020 individual 1040s that will require special manual processing through the IRS’ so-called Error Resolution System (ERS) thanks to Congress’ decision to allow taxpayers to use their 2019 income—instead of their 2020 numbers—to claim the Earned Income Tax Credit or Additional Child Tax Credit for 2020.
All those factors are contributing to a growing backlog and frustrating delays for many taxpayers. “From a taxpayer’s perspective, it feels like their return has fallen into a black hole: they do not know what is going on, when they will get their refund, why it is being delayed, or how to get answers or help,” National Taxpayer Advocate Erin Collins wrote in a blog post last week.