Report reveals amended returns chaos

If you weren’t familiar with the National Taxpayer Advocate (NTA), it supposedly represents “our voice” at the Internal Revenue Service, and part of its mission is to help taxpayers sail smoothly as possible through the tax return process. If one of us gets tossed overboard, we can file a case request with the NTA—which then throws out the metaphorical lifesaver.

But unfortunately, it now appears the COVID-19 pandemic was a tidal wave that completely wrecked the boat, and the NTA is drowning right alongside us per a recent blog post from the group. “I have made the difficult decision to suspend accepting cases where the sole issue involves the processing of amended returns until the IRS is able to work through its backlog,” it wrote Wednesday, “Due to the broad impact of COVID-19, the IRS has faced significant challenges in all its return processing operations. Unfortunately, until the IRS processes a tax return, [we] cannot assist the taxpayer.”

The IRS’s extensive backlog isn’t new—we’ve heard the agency has been woefully swamped for months, with millions of returns in purgatory and taxpayer help lines flooded with unanswered inquiries. But now it seems as if the NTA and its parent Taxpayer Advocate Service—whose job is to keep the IRS on course—are actually waving the white flag.

“Under our current procedures, [we do] not accept cases in which we cannot meaningfully expedite or improve case resolution for taxpayers,” it said, and “amended returns fall into this category.”

If you’re among those poor souls who had to file an amended return and have been waiting for a refund, you’re on your own. The current processing time posted on the IRS web page is “more than 20 weeks”—but according to the NTA, existing cases indicate it’s “considerably longer than 20 weeks.” The NTA suggests checking the online “Where’s My Amended Return” tool, which shows if your return was received up to three weeks after filing. Otherwise, sit tight.

As of October 30, the IRS was fielding 2.7 million unprocessed amended returns. The agency, hobbled by aging computer systems and understaffing, reached a peak backlog of 35 million unprocessed 2020 returns this past summer, a nearly 500% increase from pre-pandemic times. According to social media users, it stopped taking phone calls months ago.