Is the IRS Telling Tax Professionals the Truth?

Yesterday, a fellow tax professional posted on Twitter:

Ogden currently has 70 tractor trailers of unopened mail. – per IRS agent trying to explain why a POA from 2019 still hasn’t cleared yet.

Yet if you read the IRS Operations page on the current status of IRS operations you get a different picture:

[On Individual Tax Returns] The IRS is opening mail within normal timeframes and all returns received prior to 2021 have been processed if the return had no errors or did not require further review. As of June 25, 2021, we had 16.7 million unprocessed individual returns in the pipeline…

Status of Processing Form 941, Employer’s Quarterly Federal Tax Return: The IRS is now opening mail within normal timeframes. The IRS has also made significant progress in processing Forms 941. As of July 2, 2021, we had about 5,000 Forms 941 received prior to 2021 in the processing pipeline. Including current year returns, as of July 2, 2021, we had 1.6 million unprocessed 941s in the pipeline.

An individual tractor trailer has a volume of 3,489 cubic feet; 70 of these would have a volume of 244,230 cubic feet.  You could fit 1,826,967 gallons of fluid in 70 tractor trailers.  That’s a lot of mail.  Sure, Ogden does now receive all paper-filed individual returns for the western United States, but what the IRS is saying doesn’t make sense if the IRS is telling us the truth.

Ogden is where almost all specialty returns are filed (Forms 3520, 3520-A, 8804/8805/8813, etc.), and those are not mentioned in the IRS pronouncement.  Yes, that will add to the unprocessed paper (these returns must all be paper-filed), but in volume it’s not large.  Paper-filed business returns (corporations, S-Corporations, and partnerships) also mainly go to Ogden; however, most such returns are electronically filed so in volume this is likely not a big factor.

My suspicion is that a large amount of the 70 trailers are filled with returns waiting to be sent to federal warehouses.  Because of Covid, most federal employees are working from home.  Paper-filed returns are generally stored for years in federal warehouses.  The IRS cannot send those returns from Ogden to various warehouses because the warehouses are closed.  Thus, they fill tractor trailers waiting for them to reopen.  These do not represent unprocessed paperwork; they are filled with processed paperwork that must be stored.  My guess is that the telephone representative the tax professional spoke with saw the trailers, knew that some are filled with unprocessed mail, and assumed the rest were too.  I’m reaching out to my IRS Stakeholder Liaison on this issue.

Still, if you’re dealing with the IRS patience is a necessity.  We’re telling clients the following timelines (these are averages) when dealing with the IRS:

  • Refunds Where You Claim the Recovery Rebate Payment (as a tax credit): 4 months
  • Processing Time for Paper-Filed Return: 10 months
  • Processing Time for Paper-Filed Amended Return: 12 months
  • Processing Time for Electronically Filed Amended Return: 11 months
  • Response Time on Correspondence to AUR Group (CP2000s, etc.): 6 months
  • Response Time on Other Correspondence to the IRS: 12 months

Those timelines are, bluntly, ridiculous.  But that’s what’s going on today.  Though I expect the IRS to return to full staffing at Service Centers this Fall, it will likely take the IRS years to get out from under the backlog.


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