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  • IRS Commissioner Charles Rettig testified about the state of the IRS and filing season on Thursday.
  • He said that the IRS’s backlog of millions of unprocessed tax returns should be cleared by December.
  • The underfunded and understaffed agency felt pandemic strains acutely.

At the end of 2021, millions of taxpayers were still waiting on their tax refunds. They might finally come by the end of this year.

According to national taxpayer advocate Erin Collins, the IRS watchdog, the IRS still had 6.2 million unprocessed individual returns as of December 2021 — along with 2.3 unprocessed amended returns. Collins found that “many” taxpayers had been waiting on refunds for nine months.

In a Thursday Ways & Means Committee hearing, Rep. Judy Chu, a Democrat from California, asked IRS Commissioner Chuck Rettig when the backlog will be eliminated.

Rettig said that it will be “absolutely before December,” noting that his term ends in November. He also outlined some of the steps the IRS is taking to get those checks in the hands of Americans.

“We have 800 members of a surge team, which are experienced IRS employees, who have come on to accounts management. We have 700 coming in to submission processing,” Rettig said. “As of today, barring any unforeseen circumstances — Covid, et cetera, et cetera — but if the world stays as it is today, we will be what we call healthy by the end of calendar year ’22, and enter the ’23 filing season with normal inventories.”

The IRS had previously announced it was taking an “all hands on deck” approach to get refunds processed by the end of the year. That included surge teams, along with plans to hire 10,000 new employees over the next year.

In prepared testimony, Rettig said that the IRS had gotten over 63 million individual returns as of March 11 — and sent our over 45 million refunds worth over $151 billion.

The backlog is the result of an underfunded and understaffed agency, which was tasked with new pandemic-era responsibilities like sending out stimulus payments and monthly child tax credit checks, all while adjusting to the new work reality.

Those issues have a concrete impact on taxpayers, many of whom rely on refunds as a key infusion of cash. Taxpayers who had been waiting on thousands of dollars in refunds for months previously told Insider that they were struggling to keep their homes, or to afford groceries and childcare. 

“I want to better serve the American people — and so do the dedicated employees at the IRS. They will finally be able to do so if you, and your colleagues, provide us the stable, multiyear funding we need,” Rettig said in his prepared testimony. “Like all federal agencies, the IRS is best able to accomplish our mission when we receive the resources necessary to do so.”

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