UPDATE 1-US says it will clear 2021 tax return backlog this week

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By Andrea Shalal

WASHINGTON, June 21 (Reuters) – The U.S. Internal Revenue Service said on Tuesday it will complete processing all original and error-free 2021 tax returns received last year this week, clearing a backlog of 8 million statements, but the agency still faces major challenges.

The IRS said it processed more than 143 million returns received in 2022, providing more than $298 billion in refunds to taxpayers, but still had millions of paper returns to process because it started the year with a large backlog. .

The IRS said it was on track to soon eliminate a backlog of business returns from 2021 and would continue to work to resolve the few remaining individual returns from 2021 that contained errors.

US Treasury Secretary Janet Yellen warned this month that the agency was “under siege” and urged Congress to approve $80 billion in funding to help it upgrade antiquated equipment, run the backlog and equipping it to chase $600 billion in unpaid tax bills.

On Tuesday, the agency said it hired 1,500 new staff and added thousands of contractors to support its work as it struggles to cope with the increased workload.

IRS Commissioner Charles Rettig and Assistant Treasury Secretary Wally Adeyemo, in a letter to key lawmakers, praised the IRS’ efforts to clear up the backlog that has accumulated due to the COVID-19 pandemic. 19 and personnel limitations. They said IRS employees work around the clock and have already logged some 500,000 overtime hours this year, and the agency is rushing to add thousands of new employees.

Over the past four months, the IRS has held nine recruiting events, posting 3,000 job openings and putting it on track to meet its goal of hiring 5,000 new workers this year, an official with the office said. Treasure. It also automated the correction of common errors, reducing the hours tax auditors spend doing so.

But the IRS still faces daunting challenges, a Treasury official said, noting that while the agency was busy clearing the previous backlog, it now faces more than twice as many returns to process as usual at this point in the calendar year.

Rettig and Adeyemo urged Congress to provide sustained, multi-year funding to overhaul IRS technology dating back to the 1960s, improve taxpayer service and increase voluntary compliance — and equip the agency to avoid future crises. (Reporting by Andrea Shalal; Editing by Leslie Adler)

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