IRS delays when filing tax returns by paper

I'm one of those unfortunate soles who has been unable to e-file my tax returns largely due to the absence/inability of commercial software being able to handle GILTI forms - 8992 &/or 8993 - they can be relatively simple forms but I can't find software that handles it and e-files - hence the paper route.

My 2020 return has not yet been processed - file late ( ), in paper with a Fedex receipt on 23/12/21 .

This article from the Washington post makes enlightening reading:

https://www.washingtonpost.com/business/2022/04/01/irs-backlog-scanning-technology/

These 3 paragraphs seem to say it all:

Last year, the IRS received nearly 17 million paper 1040 forms, more than 4 million individual amended returns and millions of paper business returns, according to Collins.

I’m still trying to wrap my head around it: Employees transcribe all of those millions of paper tax returns manually.

This means keystroking each digit and each letter on the return. For moderately complex or longer returns with forms and schedules, the number of digits can exceed 1,000.

Maybe HMRC isn't so bad after all.........

It really is unbelievable.  I had to file by paper last year and many months later I received a letter asking me to send in my 1099-Rs, which I had forgotten to include, so definitely my fault. I normally e-file which means no paper forms and they electronically cross-check 1099s with what they already have, so why can’t they do that with paper returns since they do have them on file already.

It's amazing. I had to amend a return on paper, to carry back some FTCs. I sent it back in October, still not processed.

The whole thing is just shambolic. Stupid system, over-bureaucratic implementation, under-resourced execution, it's just embarrassing for the US. Makes HMRC look totally modern and efficient (to be fair, I have had no problems with HMRC, although I know others have).

All I can add is that when dealing with IRS personnel, be kind. They are very aware of the situation in which everyone finds themselves.  "The agency faces staff shortages, with fewer than 15,000 workers handling 240 million calls last year. Its workforce is the same size it was in 1970, with a budget 20 percent lower than it was 10 years ago." And then there's the technology infrastructure, which is an issue all to itself.   A lot of it is done by optical scanning now, but if you have less-than-perfect handwriting or if it's a Tuesday in a month with the letter "R" in it, things... can happen to your paperwork.

https://www.nbcnews.com/business/consumer/get-ready-frustrating-tax-season-warns-irs-historic-backlogs-staff-sho-rcna11834

Covid has hit all employers hard, and the prior administrations did some rather strange budgetary things that impacted the USPS and the IRS (among other agencies). So the folks that are on the ground there in the agencies are having to do the best they can with what they've got.  I regularly have to work with the VA and whereas pre-Covid responses came within about 72 hours it's now taking three weeks, minimum. That's for priority calls on back-channels. 

The Executive proposes budgets, but Congressional politics determines what funding is actually provided.  So if you have a  burning need to complain to someone "in authority", send a nastygram to your Congressman. It won't do any good, really, but it might make you feel better.   

I'm one of those unfortunate soles who has been unable to e-file my tax returns largely due to the absence/inability of commercial software being able to handle GILTI forms - 8992 &/or 8993 - they can be relatively simple forms but I can't find software that handles it and e-files - hence the paper route.

My 2020 return has not yet been processed - file late ( ), in paper with a Fedex receipt on 23/12/21 .

This article from the Washington post makes enlightening reading:

https://www.washingtonpost.com/business/2022/04/01/irs-backlog-scanning-technology/

These 3 paragraphs seem to say it all:

Last year, the IRS received nearly 17 million paper 1040 forms, more than 4 million individual amended returns and millions of paper business returns, according to Collins.

I’m still trying to wrap my head around it: Employees transcribe all of those millions of paper tax returns manually.

This means keystroking each digit and each letter on the return. For moderately complex or longer returns with forms and schedules, the number of digits can exceed 1,000.

Maybe HMRC isn't so bad after all.........

I hated doing HMRC paperwork - it was much more obnoxious than IRS forms. But HMRC were a lot easier to deal with, definitely. I'd drop dead from shock if the IRS ever put a chat service online  (and that it would both work and be helpful).  Things to also consider -

Population of the UK  of working age - about 36 million. Required for file self-assessments - around 12 million. (Per the BBC)
Population of the USA of working age = about 214 million. Required to file - https://www.irs.gov/statistics/filing-season-statistics

My daughter filed her 2020 taxes from the UK before we left in late summer. That return went to Austin (we have the postal tracking showing it was delivered.) It never surfaced again. She re-filed it (again as a paper copy) to Austin late in 2021 and got her stimulus money rather quickly thereafter. You might want to consider re-filing?

Perhaps too deep for this thread, but related to the topic, and food for thought concerning IRS efficiency and its consequences.

From IRS Commissioner Charles Rettig's prepared statement to Congress:

"A lack of resources also threatens to reduce the effectiveness of our criminal investigative work. .....

Limited IT resources preclude us from building adequate solutions for efficiently matching or reconciling data from multiple sources. As a result, we are often left with manual processes to analyze reporting information we receive. Such is the case with data from the Foreign Account Tax Compliance Act (FATCA). Congress enacted FATCA in 2010, but we have yet to receive any significant funding appropriation for its implementation. This situation is compounded by the fact that when we do detect potential non-compliance or fraudulent behavior through manually generated FATCA reports, we seldom have sufficient funding to pursue the information and ensure proper compliance."
[bold mine]
17 March 2022
https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/CommissionerRettig%20TestimonyOV-9.pdf
page 19

All across Europe, thousands of US expats and accidental Americans have had considerable troubles with their bank accounts as a direct result of FATCA. In the UK, a US expat cannot open a Goldman Sacks higher yielding savings account, amongst issues elsewhere with other bankers and brokers. Now we discover that the millions of accounts that have been reported to the IRS from Europe were of no useful value to the IRS.

@Nan D. - couldn't agree more with you - I've always been careful to be pleasant with anyone at the IRS that I speak to or interact with. In all honesty I feel that they (the employees) at both the IRS and SSA are as frustrated as anyone when it comes to their lack of resources and the continual lack of investment in more 21st century systems - what they work with is archaic.

I've mentioned elsewhere my own experience when going through an examination into my own 2017 return - it was painful and it was only towards the end when I managed to engage in e-mail correspondence that I managed to get matters resolved (late 2021). The agent I dealt with was pleasant enough but even he had to get involvement from their technical team when it came to correctly applying the correct AMT FTC to my return and totally eliminating their (originally) assessed penalty - I was persistent with them because I knew I was right with my own calculations and eventually a $30k penalty became a $5k refund - others I fear may have given up and just written the check.

The US tax system has evolved into a total nightmare for both the taxpayers and the IRS agents who have to work with it - if only the US would look at the tax  systems in other Western countries, they'd maybe learn that a simplification would bring about greater adherence and less attempts at evasion - and surprisingly a greater tax take for the country as a whole.

This is why I have been so insistent on recent threads about trying to find an e-file system. At this rate, I am likely going to be receiving my 2021 refund before my 2020 (ACTC). And, I believe this is due to a transcription error related to my paper filing.

Fortunately, the H&R block expat has been a life-saver here for me and the only one I have found that I trust, seems to get it right, and works.

I remembering reading once that the IRS filing system had literally hundreds of miles of shelving full of paper returns, and that they used abandoned mine shafts to store it. I never verified this claim, but the image stuck with me, and the truth can't be that far off. The IRS could be the inspiration for a Jorge Luis Borges short story, and the truth may even be stranger than fiction...

I mailed my tax return on 9th March. I fill in the forms myself as my situation is fairly straightforward, but I always send a paper return as I haven't found an e-filing solution that works. I'm starting to get concerned as my return isn't showing up yet when I try to check my refund status online (I'm expecting child tax credit).

Should I be worried or is this normal? I didn't use a tracked service as I have done so in the past but the tracking information ceased to be updated after it reached the US. I'm wondering if I should send another copy by UPS or FedEx to make sure they get it before June 15th. What happens if they did receive the first one and I submit the same return again?

@jeremai

I'd chill out - you're probably at the very back of the queue!

I filed my 2020 taxes (yes late I know) on paper sent via Fedex and delivered on 23/12/21 - nothing is yet showing on my on-line account. I spoke to an IRS agent a few weeks ago (on another matter) and she told me they were' months behind - short staffed, covid etc etc. My filing had a stimulus payment due of $1,200.

If you do send a duplicate copy (my advice is don't - it will only serve to confuse them!) make sure that you put in bold red ink on every page - DUPLICATE

Don't worry about the 15th June filing deadline - all expats can file for extension that takes it through to October 15th (form 4868)

I mailed my tax return on 9th March. I fill in the forms myself as my situation is fairly straightforward, but I always send a paper return as I haven't found an e-filing solution that works. I'm starting to get concerned as my return isn't showing up yet when I try to check my refund status online (I'm expecting child tax credit).

Should I be worried or is this normal? I didn't use a tracked service as I have done so in the past but the tracking information ceased to be updated after it reached the US. I'm wondering if I should send another copy by UPS or FedEx to make sure they get it before June 15th. What happens if they did receive the first one and I submit the same return again?

If you used the UK Post Office tracked mail then once it arrives in the USA you should be able to switch to US Postal Service tracking which I’ve done many times. It usually arrives in the USA within 48 hours then I sign up for email notifications and watch it bounce around various offices for several weeks. Unbelievably slow but it has always got there for me.

Just to provide an update, my tax rebate was paid into my account a couple of days ago, so just shy of six months after I mailed the paper return. Interest was added on to the amount due to the delay, although I'll have to report this as taxable income next year!

That sounds about right.

As per my earlier post I filed my 2020 return on paper , received by the IRS on 23/12/21 (late I know, blah, blah, blah!). Refund finally receive don 15/07/22.

My frustration (as per my initial post) continues - being unable to e-file due to GILTI forms not being available in standard commercial software - which I wouldn't expect anyone to develop anytime soon because it only applies to expats and very few of them also.

Yeah, that's a pain. I last tried to e-file six years ago and ran into all sorts of problems so gave up and hadn't tried again since. However, I decided to tranpose all my 2021 figures into Free File fillable forms as a test, and manged to complete everything up to the point of submitting, so I'll definitely be giving that a go next year. I also have the pleasure of helping my eldest son file for the first time next year!