IRS Operations: Status of Mission-Critical Functions

Introduction

This article provides an update on the current status of mission-critical functions at the Internal Revenue Service (IRS). It includes information on the processing times for individual and business tax returns, as well as important actions taxpayers should take.

Individual Tax Returns

Processing Times

To check the current processing times for Form 1040 and 1040X, taxpayers can refer to the Processing Status for Tax Forms dashboard. The IRS prioritizes the processing of individual tax returns that are due for refunds. Returns reflecting tax owed are processed last. However, if a payment is mailed with the tax return, it is separated upon receipt and deposited to ensure the taxpayer's account is credited for the payment. Tax returns that require manual review due to errors are processed in the order received.

Possible Delays

During the processing of a tax return, whether filed electronically or on paper, there may be delays due to various reasons, including:

• Mistakes made on the tax return
• Missing information
• Suspicious activity referred by banks

If the IRS can fix any issues without contacting the taxpayer, they will do so. However, if more information is needed or if the taxpayer needs to verify the submission of the tax return, the IRS will send a letter requesting the necessary action. Resolving these issues may take more than 120 days, depending on the taxpayer's response time and the IRS's processing capacity. It's important to note that the "Where's My Refund?" tool and IRS phone representatives may not be able to provide a specific refund date. Taxpayers are encouraged to consult the Tax Season Refund Frequently Asked Questions for more information.

Recommended Actions

In most instances, no further action is needed from the taxpayer. The IRS will contact the taxpayer by mail if additional information is required or if any changes are made to the tax return. For taxpayers who filed electronically and received an acknowledgement, no further action is necessary, except for promptly responding to any requests for information.

However, if a taxpayer is due a refund, filed a paper return more than six months ago, and the "Where's My Refund?" tool does not indicate that the IRS received the return, it is recommended to resubmit the tax return, preferably electronically. The resubmitted return should include an original signature and all documents that were submitted with the original return.

Business Tax Returns

Processing Times

To check the current processing times for Form 941 and 941X, taxpayers can refer to the Processing Status for Tax Forms dashboard. Form 941 and Form 941-X are employment tax forms that may include claims for the Employee Retention Credit (ERC).

Moratorium on ERC Claims

Due to the complexity of amended returns involving the Employee Retention Credit and the increase in aggressive and misleading marketing campaigns, the IRS slowed down the processing of returns related to the ERC. On September 14, 2023, IRS Commissioner Danny Werfel ordered an immediate moratorium on processing new ERC claims. This moratorium is still active, as there are concerns about a substantial number of ineligible claims and the potential financial risk faced by honest businesses due to aggressive promoters and marketing.

The IRS continues to work on claims received prior to the moratorium but warns that processing times will be longer due to increased fraud concerns. The IRS will announce when the moratorium is lifted.

Tax Return Volumes

As of December 9, 2023, the IRS has the following unprocessed tax return forms:

Please note that these numbers are subject to change as the IRS continues to process tax returns.

Conclusion

This article provided an update on the status of mission-critical functions at the IRS. It covered the processing times for individual and business tax returns, as well as recommended actions for taxpayers. It also highlighted the moratorium on processing new Employee Retention Credit claims and provided information on the current volumes of unprocessed tax return forms. For more information and updates, taxpayers are encouraged to visit the IRS website and consult the relevant resources.