The agency and the U.S. Department of the Treasury have already delivered an initial batch of about 90 million payments, mostly by direct deposit. Further, the IRS has said that processing work was underway on another round of payments, which would have a pay date of Wednesday and many of which would come by paper check or on a prepaid debit card. The American Rescue Plan called for the payments.
TIGTA's report said the IRS, as of Dec. 25, had more than 11.7 million paper-filed individual and business returns it needed to process. The watchdog report also said the backlog of returns, correspondence and other work resulting from the coronavirus pandemic has had and would continue to have a significant effect on the associated taxpayers. The report cited some with unprocessed individual returns who had not received tax year 2019 refunds.
"The IRS' ability to resolve these backlogs could be affected by the need to divert resources to issue additional Economic Impact Payments or an unforeseen closure of IRS Tax Processing Centers due to the pandemic," the report said.
The report didn't make any recommendations to the IRS.
In the IRS' response, Ken Corbin, commissioner of the agency's Wage and Investment Division and its chief taxpayer experience officer, said temporary closures of submission processing centers affected the agency's ability to process incoming mail, including paper-filed returns, in a timely fashion. By mid-December, though, he said the centers "were caught up and current in opening and extracting mail receipts."
The agency is working through its inventory on a first-in, first-out basis, Corbin said.
"We are seeking the authority to hire additional staffing to compensate for those employees who have not returned to work and to increase staffing to alleviate bottlenecks as prior-year and current-year work continues through the processing system," he wrote.
--Editing by Leah Bennett.
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