IRS plan for processing huge backlog

The IRS has a new plan to speed up the processing of the current backlog of returns and mail.

The IRS had over 17 million unprocessed 2020 returns and nearly 6 million items of taxpayer correspondence, according to National Taxpayer Advocate Erin Collin's testimonial on February 17, 2022. In her 2021 annual report to Congress, Collins said that she ranked recruitment, hiring, and training as the second of the ten most serious problems facing taxpayers. She has been advocating for direct-hire for the IRS to speed up the hiring process.

On February 17, Collins told Senate Finance Committee that it currently takes the IRS approximately three months to hire a new worker, from advertising the position, accepting applications, and running security checks.  Collins said the IRS had announced 5,000 new openings but only 179 had been filled by mid-February.

Collins also said low pay is part of the problem. Submission-processing staff generally offer a starting salary of less than $25,000. “In this economy, it is not surprising that the IRS is having difficulty finding enough suitable job applicants,” she told the House Ways and Means Committee’s Oversight Committee.

National Treasury Employees Union (NTEU) National President Toney Reardon said that the NTEU was informed that the IRS had been granted direct-hire authority for about 10,000 entry-level positions. The NTEU represents employees in 34 federal offices, including the IRS.

The IRS is planning to expedite its hiring process of about 10,000 workers for processing tax returns. The expedited process is intended to “address concerns that the IRS hiring process is difficult and slow,” Reardon said. The direct-hire authority would continue through December 1, 2023.

After giving public notice, direct-hire authority allows agencies to hire any qualified applicant without being required to meet certain competitive requirements. Additionally, they are not required to give preference to armed forces veterans and their unmarried widows or widowers. It also allows the IRS to disregard the "rule of three," which required hiring one of the top three e candidates rated and referred to them.

The plan will help the IRS with its daunting task of processing an unprecedented backlog of prior year returns and correspondence.

According to the latest IRS Data Book figures, the number of full-time equivalent positions in the IRS was approximately 75,700 as of 2020. Almost 25,000 of those positions were in filing and account services. If 10,000 employees are hired in a short time to process returns, the increase would quickly impact the enormous backlog of unprocessed returns and taxpayer correspondence.

The IRS will face additional problems processing returns in 2022. In 2021 math error correction notices increased from under one million in 2020 to over 14 million in 2021. In 2022 the IRS will have to correct returns that report an incorrect amount of Advance Child Tax Credit in addition to correcting the amount of stimulus received by taxpayers.

David Zubler is a tax accountant and Enrolled Agent representing clients before the IRS with over 25 years of tax experience. He is the author of four tax books and is the founder and president of Your Tax Care. The company provides business and tax education to the public at its website, David can also be contacted by email at