The effect of the Covid-19 pandemic on supply chains and prices has been much discussed. Less well-known is that the pandemic caused the development of a major backlog at the IRS.
As of the end of August this year, some 8.2 million individual tax returns still needed to be processed.
But according to a November update, significant progress has been made. The number of unprocessed returns has been cut to 4.2 million. “These include tax year 2021 returns and late filed prior year returns. Of these, 1.9 million returns require error correction or other special handling, and 2.3 million are paper returns waiting to be reviewed and processed.”
There are also an estimated 900,000 unprocessed amended tax returns in November, filed on Form 1040-X. They are processed in the order received, and processing can take up to 20 weeks, the IRS reports. Taxpayers may get status reports on their amended returns by going to “Where’s My Amended Return?” at the IRS website: https://www.irs.gov/filing/wheres-my-amended-return.
All this progress is welcome, but a new tax season is about to begin. The additional funding for the IRS enacted by Congress earlier this year may alleviate such problems and reduce delays in the future.
We live in uncertain political and financial times. This makes existing tax law challenges daunting and future tax laws more complicated than ever. You can be sure that our seasoned tax experts monitor ever-changing tax laws and their effects on your investments and overall wealth plan. For more information on tax planning and strategies, read some of our additional blog posts: https://www.lptrust.com/blog/category/tax-planning/.
If you are a Legacy client and have questions, please do not hesitate to contact your Legacy advisor. If you are not a Legacy client and are interested in learning more about our approach to personalized wealth management, please contact us at 920.967.5020 or email@example.com.
© 2022 M.A. Co. All rights reserved.
This newsletter is provided for informational purposes only.
It is not intended as legal, accounting, or financial planning advice.