If you have been following along with the news, you know that the government is in a partial shutdown. There are many questions that are coming up about whether or not people can file taxes during this time. The short answer is yes, but there are some caveats to consider before filing your taxes this year.
In this post, we find out the following: Can You File Taxes With The Government Shutdown, when will the irs start processing electronic returns, and when will the irs start processing paper returns.
Can You File Taxes With The Government Shutdown
There is a lot of confusion over whether or not people can file taxes while the government is shut down.
If you’re wondering if you can file your taxes with the government shutdown, the answer is yes. The IRS will be open during tax season and offering tax help for taxpayers at all stages of their ownership, including filing, answering questions about refunds and making payments on delinquent accounts. If you need to make a payment or inquire about filing returns from previous years, there are information hotlines available to help guide you through your options. Additionally, the IRS has announced that they will accept electronic returns as normal from January 28th until February 5th (and possibly after).
However, there is good news and bad news here:
- The bad news: You won’t get your refund until after February 5th. The IRS announced that it cannot issue refunds before then because many employees won’t be on hand to process them without paychecks coming in regularly throughout this period of time.*
The majority of IRS employees are furloughed, but more than enough are working to keep things running.
If you’re worried about the government shutdown, your taxes are still being processed. The majority of IRS employees are furloughed, but more than enough are working to keep things running.
Many people assume that the IRS is shut down entirely during this time, but this isn’t true at all. While many employees will be on furlough and unable to work or access their email accounts, the agency still has plenty of workers who are able to continue working during the shutdown and process tax returns as usual. For example:
- The IRS is still accepting tax returns
- The IRS is still processing tax returns
- The IRS is still sending out refunds (if you’ve already filed)
- The IRS is still sending out notices and letters explaining why it’s taking longer than usual for your refund to arrive (if you haven’t yet filed)
You do not need an appointment to file taxes with the IRS this year.
When it comes to filing your taxes, you have a couple of options:
- You can file on your own by using an online tax preparation software like TurboTax or H&R Block (or any other free version).
- You can make an appointment with the IRS and have them do it for you.
But no matter what option you choose, the process is still going to be pretty much the same. The only difference is that if you go through an agency like TurboTax or H&R Block, then they’re going to charge a fee for their services. But either way, if there isn’t enough staff available at one of these agencies right now because of sequestration cuts and furloughs due to government shutdowns like this one happening right now; then they won’t be able to take care of your needs either! So don’t worry if something goes wrong with those options — there’s another way too!
The IRS won’t be able to answer most questions about tax returns until after February 5th.
The IRS will not be able to answer most questions about tax returns until after February 5th.
Taxpayers will not be able to access the IRS website (https://www.irs.gov) or the Taxpayer Advocate Service website (https://www.irs.gov/advocate).
They may not be able to file taxes online, or get transcripts of their previous years’ tax returns or request refunds from some financial institutions if those services are provided through the IRS website.
Certain types of payments that would normally go out from the IRS during this time have been suspended as well, including refunds for taxpayers who’ve overpaid their taxes during the year and payments to people who have already filed for Social Security disability benefits in 2019 but haven’t yet received benefits due them
You can still call your local tax professional for help during this time if you have questions about your taxes.
While you can still file taxes with the government shut down, it’s a good idea to call your local tax professional for help if you have any questions about your taxes. You can also use online resources to help you file your taxes and make sure they’re done correctly.
Yes, you can file taxes with the government shut down and should do so as soon as possible to avoid identity theft.
If the government is shut down, you can still file your taxes. However, it’s important to note that if you are unable to pay your taxes due to the shutdown, you should file as soon as possible. If an employee at a local IRS office is unable to work because of the government shutdown and does not receive their paycheck on time, they may be less inclined to help you with your taxes even though they are technically still employed by the IRS and working.
If family or friends are helping you with your tax return this year due to financial hardship, they may also be impacted by this issue because they will most likely not be able to access any online resources during their usual hours of operation. In addition, many people who normally work at a local CPA firm or H&R Block will not have access during regular business hours until after things get back up and running again. Finally- if someone was planning on going into work early tomorrow morning but now has nowhere else left where they can go until after 11am (when most businesses open), then they would probably rather spend time with family than come into work anyway… so please don’t call just yet!
when will the irs start processing electronic returns
WASHINGTON — The Internal Revenue Service announced that the nation’s tax season will start on Monday, January 24, 2022, when the tax agency will begin accepting and processing 2021 tax year returns.
The January 24 start date for individual tax return filers allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly. Updated programming helps ensure that eligible people can claim the proper amount of the Child Tax Credit after comparing their 2021 advance credits and claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.
“Planning for the nation’s filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare,” said IRS Commissioner Chuck Rettig. “The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don’t face processing delays. Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year. And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. People should make sure they report the correct amount on their tax return to avoid delays.”
The IRS encourages everyone to have all the information they need in hand to make sure they file a complete and accurate return. Having an accurate tax return can avoid processing delays, refund delays and later IRS notices. This is especially important for people who received advance Child Tax Credit payments or Economic Impact Payments (American Rescue Plan stimulus payments) in 2021; they will need the amounts of these payments when preparing their tax return. The IRS is mailing special letters to recipients, and they can also check amounts received on IRS.gov.
Like last year, there will be individuals filing tax returns who, even though they are not required to file, need to file a 2021 return to claim a Recovery Rebate Credit to receive the tax credit from the 2021 stimulus payments or reconcile advance payments of the Child Tax Credit. People who don’t normally file also could receive other credits.
April 18 tax filing deadline for most
The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way federal holidays do. The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia for everyone except taxpayers who live in Maine or Massachusetts. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots’ Day holiday in those states. Taxpayers requesting an extension will have until Monday, October 17, 2022, to file.
Awaiting processing of previous tax returns? People can still file 2021 returns
Rettig noted that IRS employees continue to work hard on critical areas affected by the pandemic, including processing of tax returns from last year and record levels of phone calls coming in.
“In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me,” Rettig said. “IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us. And we will continue to look for ways to improve. We want to deliver as much as possible while also protecting the health and safety of our employees and taxpayers. Additional resources are essential to helping our employees do more in 2022 – and beyond.”
The IRS continues to reduce the inventory of prior-year individual tax returns that have not been fully processed. As of December 3, 2021, the IRS has processed nearly 169 million tax returns. All paper and electronic individual 2020 refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.
Taxpayers generally will not need to wait for their 2020 return to be fully processed to file their 2021 tax returns and can file when they are ready.
Key information to help taxpayers
The IRS encourages people to use online resources before calling. Last filing season, as a result of COVID-era tax changes and broader pandemic challenges, the IRS phone systems received more than 145 million calls from January 1 – May 17, more than four times more calls than in an average year. In addition to IRS.gov, the IRS has a variety of other free options available to help taxpayers, ranging from free assistance at Volunteer Income Tax Assistance and Tax Counseling for the Elderly locations across the country to the availability of the IRS Free File program.
“Our phone volumes continue to remain at record-setting levels,” Rettig said. “We urge people to check IRS.gov and establish an online account to help them access information more quickly. We have invested in developing new online capacities to make this a quick and easy way for taxpayers to get the information they need.”
Last year’s average tax refund was more than $2,800. More than 160 million individual tax returns for the 2021 tax year are expected to be filed, with the vast majority of those coming before the traditional April tax deadline.
Overall, the IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically if they choose direct deposit and there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.
By law, the IRS cannot issue a refund involving the Earned Income Tax Credit or Additional Child Tax Credit before mid-February, though eligible people may file their returns beginning on January 24. The law provides this additional time to help the IRS stop fraudulent refunds from being issued.
Some returns, filed electronically or on paper, may need manual review, which delays the processing, if our systems detect a possible error or missing information, or there is suspected identity theft or fraud. Some of these situations require us to correspond with taxpayers, but some do not. This work does require special handling by an IRS employee so, in these instances, it may take the IRS more than the normal 21 days to issue any related refund. In those cases where IRS is able to correct the return without corresponding, the IRS will send an explanation to the taxpayer.
File electronically and choose direct deposit
To speed refunds, the IRS urges taxpayers to file electronically with direct deposit information as soon as they have everything they need to file an accurate return. If the return includes errors or is incomplete, it may require further review that may slow the tax refund. Having all information available when preparing the 2021 tax return can reduce errors and avoid delays in processing.
Most individual taxpayers file IRS Form 1040 or Form 1040-SR once they receive Forms W-2 and other earnings information from their employers, issuers like state agencies and payers. The IRS has incorporated recent changes to the tax laws into the forms and instructions and shared the updates with its partners who develop the software used by individuals and tax professionals to prepare and file their returns. Forms 1040 and 1040-SR and the associated instructions are available now on IRS.gov. For the latest IRS forms and instructions, visit the IRS website at IRS.gov/forms .
Free File available January 14
IRS Free File will open January 14 when participating providers will accept completed returns and hold them until they can be filed electronically with the IRS. Many commercial tax preparation software companies and tax professionals will also be accepting and preparing tax returns before January 24 to submit the returns when the IRS systems open.
The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds – as well having all the information they need to file an accurate return to avoid delays. The IRS’s Free File program allows taxpayers who made $73,000 or less in 2021 to file their taxes electronically for free using software provided by commercial tax filing companies. More information will be available on Free File later this week.
In addition to IRS Free File, the IRS’s Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs free basic tax return preparation to qualified individuals.
Watch for IRS letters about advance Child Tax Credit payments and third Economic Impact Payments
The IRS started sending Letter 6419, 2021 advance Child Tax Credit, in late December 2021 and continues to do so into January. The letter contains important information that can help ensure the return is accurate. People who received the advance CTC payments can also check the amount of the payments they received by using the CTC Update Portal available on IRS.gov.
Eligible taxpayers who received advance Child Tax Credit payments should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advance Child Tax Credit payments can claim the full credit by filing a tax return.
The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to individuals who received a third payment in 2021 in late January. While most eligible people already received their stimulus payments, this letter will help individuals determine if they are eligible to claim the Recovery Rebate Credit for missing stimulus payments. If so, they must file a 2021 tax return to claim their remaining stimulus amount. People can also use IRS online account to view their Economic Impact Payment amounts.
Both letters include important information that can help people file an accurate 2021 tax return. If the return includes errors or is incomplete, it may require further review while the IRS corrects the error, which may slow the tax refund. Using this information when preparing a tax return electronically can reduce errors and avoid delays in processing.
The fastest way for eligible individuals to get their 2021 tax refund that will include their allowable Child Tax Credit and Recovery Rebate Credit is by filing electronically and choosing direct deposit.
Tips to make filing easier
To avoid processing delays and speed refunds, the IRS urges people to follow these steps:
Organize and gather 2021 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, Adoption Taxpayer Identification Numbers, and this year’s Identity Protection Personal Identification Numbers valid for calendar year 2022.
Check IRS.gov for the latest tax information, including the latest on reconciling advance payments of the Child Tax Credit or claiming a Recovery Rebate Credit for missing stimulus payments. There is no need to call.
Set up or log in securely at IRS.gov/account to access personal tax account information including balance, payments, and tax records including adjusted gross income.
Make final estimated tax payments for 2021 by Tuesday, January 18, 2022, to help avoid a tax-time bill and possible penalties.
Individuals can use a bank account, prepaid debit card or mobile app to use direct deposit and will need to provide routing and account numbers. Learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool.
File a complete and accurate return electronically when ready and choose direct deposit for the quickest refund.
when will the irs start processing paper returns
This is Part Three of a blog series on IRS Processing and my recent experience at the IRS’s Kansas City campus, where I had the privilege of working alongside mailroom employees. We posted Parts One and Two last week. On reflection, not only was I fortunate to meet so many wonderful and dedicated people working to assist taxpayers, but I was also able to personally observe the overwhelming amount of paper through which the IRS must work. Seeing seemingly endless carts of paper while knowing that documents buried within those carts represent delayed refunds for millions of taxpayers in need is beyond difficult for our employees. This blog provides updates on the IRS’s progress in working through its paper backlog.
Near the end of October, more than 164 million individual tax returns were filed (92 percent filed electronically), and nearly 109 million refunds were issued totaling nearly $345 billion. Tax refunds are a lifeline for some taxpayers and important for almost all. Some taxpayers will use refunds to care for their families or just to meet basic living expenses. Others will use refunds to pay employees or keep their businesses operating. To state the obvious, the 2022 filing season was another frustrating one for taxpayers, tax professionals, and the IRS. Because the book on the 2022 filing season is long and reads similarly to the previous couple of filing seasons in terms of delays, here is how the book’s back cover summary might read:
Millions of taxpayers continued to endure unreasonably long refund delays, as the IRS administered another filing season while simultaneously trying to catch up on its backlog of work carried over from the previous year. Paper remains a serious problem and is its Achilles heel. The IRS is getting closer to meeting its objectives, but unfortunately, millions of individual and business returns still await processing, millions more have been pulled out due to errors or discrepancies that must be addressed, and millions of amended returns and correspondence are still awaiting processing. For some, this filing season may have felt like Groundhog Day. We will soon find out whether the upcoming filing season adds a similar chapter to this series or whether the IRS can work through its backlog, process tax returns and correspondence quickly, and answer its phone calls at a level that substantially improves the taxpayer experience during the next filing season.
Comparison to This Time Last Year
Because of how the IRS tracks data, the more useful way to view inventory levels is to look at the calendar year when the IRS received the tax return from the taxpayer, not the tax year for which the return is filed. Using the calendar year of receipt tells us how many returns the IRS received during a definitive timeframe and, importantly, how many are carried over to be worked the next year. The IRS had its calendar year (CY) 2022 inventory backlog down to under eight million individual and business paper returns in need of processing as of October 21, whereas it had about seven million CY 2021 individual and business paper tax returns in its inventory around this same time last year. However, with around six million CY 2022 tax returns held in suspension in need of error correction or employee involvement before processing can be finalized, the IRS finds itself with about 400,000 more tax returns held in suspension for special processing in comparison to this time last year. So, numerically the IRS is in about the same place that it was around the same time last year.
However, the IRS deployed additional resources to address the processing backlog this year and aims to be “healthy” by year-end. In recent weeks, the IRS has been processing between 900,000 to 1.1 million total individual and business returns per week and has about six weeks left before it shuts down its systems to prepare them for the upcoming filing season. The key question is how the IRS defines “healthy?”
I look at the numbers and see millions of taxpayers that are still waiting for their returns to be processed. As of October 21, the IRS had about three million individual returns and north of four million business returns awaiting initial processing, as well as about two million amended individual and business returns. In total, it has over 6.3 million returns in suspense, with about two million in unpostable status, 1.1 million processing rejects, a half-million in error resolution, and nearly three million still waiting to be worked for potential identity theft. Most math errors involved reconciliation of the Recovery Rebate Credit or the Child Tax Credit, and through October 10, the IRS had sent nearly 14 million notices mostly concerning those issues. Regardless of the IRS’ definition, none of the above taxpayers will see the IRS as “healthy” until their return is worked.
The IRS regularly updates information on its public webpage, IRS Operations During COVID-19: Mission-Critical Functions Continue, to provide taxpayers with general information concerning service delays, of which the delays include live phone support, processing paper tax returns and taxpayer correspondence, and reviewing tax returns. As of November 7, 2022, the IRS states it is:
…opening mail within normal time frames, and we’ve processed all paper and electronic individual returns in the order received if they were received prior to April 2022 and the return had no errors or did not require further review.
That means individuals who filed paper Forms 1040, U.S. Individual Income Tax Return, have now been waiting nearly two-thirds of a year to receive their refunds. Individuals who filed returns that were not error-free or that required review may have been waiting even longer. The IRS had north of three million unprocessed individual tax returns that require IRS employee involvement.
Individual Taxpayers Continue to Experience Delays
As noted, many individual taxpayers have had their refunds delayed for extended periods of time. Some are even still waiting for pandemic relief benefits as the IRS continues to review and process unemployment compensation exclusion corrections and systemically issue corresponding refunds and notices to taxpayers on tax year 2020 returns. As I touched on in Part One, the exclusion required a tremendous amount of necessary yet unexpected duplicative work on millions of tax returns.
The IRS is also delayed in processing individual amended returns and currently says it may take more than 20 weeks to process them. It doesn’t provide a maximum number of weeks, and many taxpayers have been waiting much longer than 20 weeks. As of October 21, the IRS had 1.3 million unprocessed individual amended returns.
Delays Continue for Business Taxpayers
Likewise, business taxpayers are continuing to feel the strain of delays in IRS processing. Some business taxpayers are still waiting for pandemic relief benefits, as the IRS has over 250,000 unprocessed Forms 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, in its inventory. Unfortunately, some cannot be processed until the related Form 941, Employer’s Quarterly Federal Tax Return, is processed first, and as of November 2, the IRS still had about 2.5 million Forms 941 in its inventory awaiting processing. I suspect a large portion of the Form 941-X amended returns relate to the Employee Retention Tax Credit authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (2020) and extended by the Consolidated Appropriations Act (2021). Other taxpayers are still waiting for tentative refunds claimed on Forms 1139, Corporation Application for Tentative Refund, or Forms 1045, Application for Tentative Refund, to be processed. These forms generally were filed many months ago to carry back losses to generate refunds.
Delays in Taxpayer Correspondence
There will always be a need for the IRS and taxpayers to correspond together. The conundrum is that taxpayers mostly respond via the only method the IRS usually offers, regular mail – and paper is constantly flowing in. Even though the IRS may be opening mail within its normal timeframes, it’s important to keep in mind that responses are not likely to be timely processed. Currently, the IRS has about 4.5 million pieces of correspondence awaiting processing. Notably, many of these documents are scheduled to be worked by the customer service representatives (CSRs) who split their time during the filing season between answering phones and processing amended returns and correspondence.
Delays for Taxpayers – The Common Denominator
Paper. Although the IRS has committed to clearing the paper backlog by the end of the year, there is little time left on the clock. A swift reduction in paper provides the only hope for accomplishing that lofty goal. Scanning technology would help drastically and would provide cause for optimism. To press the IRS to accelerate the development and implementation of scanning technology, I issued a Taxpayer Advocate Directive (TAD) to the IRS Deputy Commissioners in March, and I appealed their response to the Commissioner in July. I have posted my TAD, my appeal, and the two responses on my March 30, 2022 blog and my August 4, 2022 blog.
I am hopeful that the IRS will initiate scanning next filing season and by 2024 will have established a scanning process for all paper returns. It is my understanding the goals for next filing season will be to process refund returns first and to start scanning some returns for uploading into its system. If the IRS can do this, it will be good news for taxpayers awaiting refunds. Although good news, my concern is the IRS will need to process the carryover returns first and therefore, it must put the backlog behind us once and for all.
Lessons Learned
Because CSRs divide their time between two key roles during the filing season: (1) answering calls on the toll-free line and (2) assisting with processing amended returns and taxpayer correspondence, the more time spent working one means less time spent working the other. In addition, the IRS will soon pull many seasoned CSRs offline before the beginning of the next filing season to provide training for new hires and updates for existing CSRs and, albeit short-term, that will further strain limited resources. It is well-known the percentage of calls the IRS answered prior to the COVID-19 pandemic was already unacceptably low, and with the high volume of calls the last couple of years, the percent of phone calls answered has plummeted even lower – around ten percent.
TAS has historically recommended the IRS improve telephone customer service levels to reach an 85 percent level of service for answering calls, and the IRS has stated it will seek to achieve that level of service during the 2023 filing season. While that commitment should feel like good news, I am concerned about the collateral effects of the potential sacrifices the IRS may have to make to achieve that goal. Logically, to achieve an 85 percent level of phone calls answered, the IRS will have to assign most or even all CSRs to answer phone calls. Remember, time CSRs spend answering phone calls means time CSRs are not spending on their other key filing season role: processing amended returns and correspondence. Taxpayers, many quite literally, cannot afford to have the IRS take steps that have potential for increasing or creating a new paper backlog.
Answering taxpayer phone calls and processing tax returns and correspondence are two core aspects of the IRS mission that it must be able to handle. However, the IRS must continue to learn from the lessons of past filing seasons to improve taxpayer service, avoid causing self-inflicted challenges, and not aim to achieve the highest level of phone service if it comes at a cost of creating paper backlog. Although it will result in fewer calls being answered in the short term, I recommend that CSRs rotate between both key roles during the 2023 filing season to provide the best possible service for taxpayers in the long term. I believe we all share the goal of a fully staffed and modernly equipped IRS that operates with 21st century technology and efficiency.
As the National Taxpayer Advocate, I want the best possible service for taxpayers and will continue to provide my input as the IRS creates its Operational Plan with the increased funding provided by Congress under the Inflation Reduction Act (IRA22).
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.