The IRS continues to make progress in inventorying tax returns, payments, refunds and correspondence. However, some sectors continue to experience delays. Here’s where things stand.
The IRS says it has processed all paper and electronic individual returns received through April 2023, and they are opening mail within the normal timeframe. This means that they have processed all returns for tax year 2021 or earlier, unless those returns had errors or did not require further review.
As of July 8, 2023, the agency had 2.42 million unprocessed individual returns. These include 2022 tax returns, 2021 returns that need review or correction, and late-filed prior-year returns. Of these, 1.6 million returns require error correction or special processing, and 820,000 are paper returns awaiting review and processing. This work usually does not require taxpayer correspondence, but it does require special processing by an IRS employee, so in these cases, the IRS takes more than 21 days to issue a refund.
For individual tax returns received this year, the IRS will process the tax returns for which it is due first. Tax returns that reflect the tax are processed last—but of course the IRS wants to pay. If the payment is mailed with the tax return, the payment will be separated upon receipt and deposit.
Tax returns that must be manually reviewed due to errors will be processed in the order received.
Some returns need a second look. If the IRS needs more information or asks you to confirm that you have filed a return, they will send you a letter. This may take more than 120 days, depending on how quickly and accurately you respond and how quickly the agency can process your return.
The IRS issues most of the money in less than 21 days. However, if you filed on paper and are expecting a refund, it may take four weeks or more for your refund to be processed. Check where is my pay? For more detailed information. The information is available 24 hours after the 2022 tax year return is filed electronically, three or four days after the 2020 or 2021 tax year return is filed electronically, and four weeks after the paper return is filed.
You can also call the Automated Refund Hotline at 800-829-1954. The hotline cannot give you the status of your refund for any year other than the 2022 tax year.
If the IRS needs more information to process your return, they will contact you by mail. Note that while the IRS is still processing your return or correcting errors, the agency cannot provide you with a specific date for your refund.
If you get a refund and I filed it on paper more than six months ago, where is my refund? does not indicate that your return has been received, you must resubmit your tax return – electronically if possible. The tax return must be signed (new ink if on paper) and include all documents submitted with the original return. But if this particular set of facts doesn’t apply to you, Do not file your tax return again. This will confuse the IRS.
As of July 8, 2023, the IRS had 1.29 million unprocessed amended individual tax returns — an increase from earlier this year and representing additional returns received during tax season. The agency processes these payments in the order they are received and the current lead time may be longer than 20 weeks. With that in mind, don’t file the same return more than once – the pile will only grow. Should taxpayers check where my amended return is? Your refund status in the amended return.
Payroll tax returns
As of July 13, 2023, the IRS had 266,000 unprocessed Form 941, an employer’s quarterly federal tax return. These returns are processed in the order received.
As of July 12, 2023, the total inventory of unprocessed revised wage returns was approximately 442,000—many of them related to employer retention credits (ERCs). Some amended forms cannot be processed until the corresponding 941s are processed. Although not all of these returns involve a Covid-19 credit, all inventories are only operated at two locations (Cincinnati and Ogden) with staff trained to review these returns.
The IRS receives more than 95,000 applications for tax-exempt status each year. Applications are being processed, but there may be a significant waiting time for review.
Forms 1023-EZ submitted after July 7, 2023 have not yet been assigned to a specialist, and Forms 1023 submitted after November 22, 2022 have not yet been assigned.
For Forms 1024, applications submitted after January 19, 2023 have not yet been assigned to a specialist, and Forms 1024-A submitted after December 15, 2022 have not yet been assigned.
The IRS is currently processing Forms W-7, an application for an IRS Individual Taxpayer Identification Number, received in April 2023. They are processed in the order they are received — the processing time is currently 12 weeks.
You will be notified once your ITIN is assigned or if the IRS requires additional information, including additional documentation. Original identification documents submitted on Form W-7 will be returned to the mailing address of record as soon as possible. The relevant tax return is then submitted for processing.
Forms 2848 and 8821
The IRS says it processes third-party authorizations, including Forms 2848 and 8821, on orders received. They cannot currently provide a completion date.
The IRS recommends submitting these forms through the Tax Pro reporting tool if you have a Centralized Authorization Number (CAF).
Note that the Submitting Forms 2848 and 8821 online tool allows Form 2848 and Form 8821 authorizations to be uploaded online, but still requires manual processing.
In practice, tax professionals can also submit Form 2848 to the agent you speak with over the phone—by fax (don’t expect them to be processed for future use).
The IRS has resumed issuing most notices, including those for collections.
If there is an error on your tax return and the IRS can correct it without contacting you, they will. However, if the IRS needs more information or asks you to confirm that you have filed a tax return, they will send you a letter. These issues can take more than 120 days to resolve, depending on how quickly and accurately you respond and how quickly the IRS can process your return.
The IRS says telephone support is open to taxpayers and tax professionals. This does not mean that all calls are answered – calls made during peak hours are still recommended to be tried later. I can tell you that the call service is up and running on some lines.
Taxpayer Assistance Centers (TAC)
Taxpayer assistance centers are open. You can find one near you online here.
Earlier this month, the IRS announced it is reopening previously closed TACs and adding additional TACs. You can read more about them here.
Taxpayer Advocacy Service (TAS)
All local TAS phone lines are open. If you have a tax problem that you have been unable to resolve, or if your IRS problem is causing financial difficulties, an attorney can help. You can call 877-777-4778 or visit the Taxpayer Advocate Service to find the phone number for your local TAS office.
TAS cannot accept late refund assistance requests for tax returns that are pending, including requests for assistance made through the System Advocacy Management System (SAMS).