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As the Internal Revenue Service digs up a historic backlog on income tax returns, it also faces a massive backlog in the paper business tax category.
According to a report by the General Inspector of the Ministry of Finance for the Tax Administration, the coronavirus pandemic led to a backlog of almost 8 million business tax returns filed in paper form at the end of 2020.
This is the latest bad news for the IRS as it seeks to keep up with the incredible demand related to stimulus and child tax credit payments and to process millions of tax returns – both personal and business.
The astonishing increase in arrears business tax returns meant an increase of 3,230% compared to 2019. The problem? The massive changes that came into play during the peak of the pandemic in 2020 when economic lockdown forced businesses as a public health crisis unfolded.
Millions are still waiting for tax refunds as the IRS backlog grows due to the pandemic
However, unlike personal income tax returns, the IRS is making progress with paper business tax returns. By late summer, the agency had reduced the order backlog to just under 300,000. However, there is no confirmation of this number at this point.
“We have taken and continue to innovate to tackle inventory build-up while protecting the health and safety of our employees and the taxpayer public,” said Kenneth Corbin, commissioner, Payroll and Investment for the IRS.
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