Following intensive work during the past several months, the Internal Revenue Service announced
today that processing on a key group of individual tax returns filed during 2021 will be completed
by the end of this week.

Due to issues related to the pandemic and staffing limitations, the IRS began 2022 with a larger
than usual inventory of paper tax returns and correspondence filed during 2021. The IRS took a
number of steps to address this, and the agency is on track to complete processing of originally
filed Form 1040 (individual tax returns without errors) received in 2021 this week.

Business paper returns filed in 2021 will follow shortly after. The IRS continues to work on the few
remaining 2021 individual tax returns that have processing issues or require additional information
from the taxpayer.

As of June 10, the IRS had processed more than 4.5 million of the more than 4.7 million individual
paper tax returns received in 2021. The IRS has also successfully processed the vast majority of tax
returns filed this year: More than 143 million returns have been processed overall, with almost 98
million refunds worth more than $298 billion being issued.

IRS employees continue working hard to process these and other tax returns filed in the order
received. The IRS continues to receive current and prior-year individual returns and related
correspondence as people file extensions, amended returns and a variety of business tax returns.

To date, more than twice as many returns await processing compared to a typical year at this
point in the calendar year, although the IRS has worked through almost a million more returns to
date than it had at this time last year. And a greater percentage of this year’s inventory awaiting
processing is comprised of original returns which, generally, take less time to process than
amended returns.

To work to address the unprocessed inventory by the end of this year, the IRS has taken
aggressive, unprecedented steps to accelerate this important processing work while maintaining
accuracy. This effort included significant, ongoing overtime for staff throughout 2022, creating
special teams of employees focused solely on processing aged inventory, and expediting hiring of
thousands of new workers and contractors to help with this ongoing effort.

Additionally, the IRS has greatly improved the process for taxpayers whose paper and
electronically filed returns were suspended during processing for manual review and correction –
referred to as error resolution. Last filing season, an IRS tax examiner could correct an average of
70 tax returns with errors per hour. Thanks to new technology implemented this filing season, 180
to 240 returns can now be corrected per hour. As of June 12, 2021, there were 8.9 million tax
returns in error resolution. As of June 10, 2022, there were just 360,000 returns awaiting
correction.

The IRS will continue its intense effort to make progress on processing these paper returns in the
months ahead.

“IRS employees have been working tirelessly to process these tax returns as quickly as possible
and help people who are waiting on refunds or resolution of an account issue,” said IRS
Commissioner Chuck Rettig. “Completing the individual returns filed last year with no errors is a
major milestone, but there is still work to do. We remain focused on doing everything possible to
expedite processing of these tax returns, and we continue to add more people to this effort as our
hiring efforts continue this summer.”

Rettig emphasized that adding sustained funding increases for the IRS will help the agency add
more employees to process tax returns and answer phones as well as help improve technology
and ensure fair enforcement of the tax laws.

“Taxpayers and tax professionals deserve the absolute highest-quality service from the nation’s
tax system,” Rettig said. “Long-term and consistent funding for the agency is critical to ensuring
the IRS is prepared for future tax seasons. It’s also critical for the IRS to be ready to answer the call
for the nation during the next crisis, just as the agency did delivering three rounds of historic
stimulus payments and advance Child Tax Credit payments during the pandemic.”

The IRS reminds millions of taxpayers who have not yet filed their 2021 tax returns this year –
including those who requested an extension until October 17 – to make sure they file their returns
electronically with direct deposit to avoid delays. People who use e-file avoid the delays facing
those who file paper returns; e-filed returns with no errors are typically processed in 21 days.

The IRS also urges people to file as soon as they are ready. There is no need to wait until the last
minute before the October 17 extension deadline. Filing sooner avoids potential delays for
taxpayers, and it also assists the larger ongoing IRS efforts to complete processing tax returns this
year.

Additional details on processing and other operations are available on a special page on IRS.gov

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