Advocates Say This Is the Most Serious Problem With the IRS Today

It's an issue that may have impacted you in the past.

Many people get excited about the idea of a refund when they file their taxes. And why wouldn't they? For a lot of folks, that's money that can be used for things like paying off credit card debt and covering upcoming bills.

In fact, many tax filers are extremely reliant on the money they receive in tax refund form. And so they can't afford to wait to see it hit their bank accounts.

But the IRS has been notoriously late in sending out refunds for paper returns over the past few years. And now, that issue has been flagged in a new report by the Taxpayer Advocate Service, which highlights various problems the agency needs to address.

Refund backlogs are a big problem

In 2020, the IRS made the decision to shut down its field offices in response to the COVID-19 pandemic. This wasn't an unreasonable thing to do. In fact, many government agencies, including Social Security, made their offices inaccessible to the public for a period of time as the nation attempted to cope with a major health crisis.

The problem, though, is that many taxpayers still file their returns on paper. And those paper returns need to be processed manually.

By the time the IRS was able to get workers back into its offices, it already had a massive backlog of paper tax returns to go through. And that backlog hasn't really gotten much better. In fact, the Taxpayer Advocate Service says that delays in issuing refunds is the No. 1 most serious problem with the IRS today.

For the past 2.5 years, the agency has forced millions of filers to wait longer than usual to get the money they're entitled to. And while the agency does have plans to ramp up hiring (thanks to an uptick in funding from the Inflation Reduction Act), it may take a while for the IRS to improve its turnaround time for processing paper returns and issuing refunds.

A good way to avoid seeing your refund delayed

Given the way inflation is surging these days, money has gotten tight for a lot of people. And you may not be in a position where you can afford a delayed tax refund. If that's the case, there's one important thing you need to do this tax season -- submit your taxes electronically rather than on paper.

Electronic returns don't have to be processed manually, and the IRS typically issues refunds for electronically filed returns within three weeks. But the normal turnaround time for refunds stemming from paper returns is six weeks -- and that's during periods when the IRS isn't trying to dig its way out of a hole.

All told, the IRS clearly has some work to do to improve the customer experience for taxpayers. But if you don't want to risk a delay in your refund this tax season, make a point to file your taxes electronically -- even if you've always filed on paper in the past.

And if you're worried about messing up, fear not. Today's tax software is extremely easy to use. And it may even reduce your chances of making an error, at least with regard to math.