Pandemic Backlog

The Treasury Department and the IRS announced an aggressive plan to end the pandemic inventory backlog this year. Deputy Secretary of the Treasury Wally Adeyemo and IRS Commissioner Charles P. Rettig traveled to the IRS Campus in Philadelphia where they outlined an aggressive plan to end the backlog. This year, millions of taxpayers are awaiting the processing of their tax returns and receipt of their refunds. The backlog has created one of the most challenging tax filing seasons in U.S. history. The IRS’s backlog challenges today stem from two key sources. First, the agency has been chronically underfunded for more than a decade, with its budget cut by nearly 20% since 2010. The IRS workforce is the same size it was in 1970. However, the U.S. population has grown by 60 percent and the complexity of the economy has increased exponentially. Second, the pandemic created a unique set of new operational challenges for the IRS. The agency was called upon to support emergency relief for taxpayers. This included distributing an unprecedented three rounds of Economic Impact Payments, totaling over $830 billion, to 85 percent of American households. Including individual refunds, the IRS has distributed over $1.5 trillion to Americans since the pandemic began. To tackle the backlog, the IRS has laid out the following approach.