The IRS has faced a significant backlog of over 35 million individual and business income tax returns requiring manual processing, a result of an “unprecedented” number of returns needing additional review, according to the National Taxpayer Advocate.

This “historically high” volume of returns awaiting manual review means that many individual and business taxpayers may experience delays in receiving their refunds as the IRS works through the backlog.

The backlog includes millions of paper tax returns, returns suspended during processing that require further review, and amended returns waiting to be processed.

A substantial portion of the suspended returns were placed in the Error Resolution System (ERS) unit, where identified errors necessitate manual review by IRS employees. Typically, the ERS can swiftly address these errors, but the sheer volume and complexity of this particular filing season have led to prolonged processing times.

The National Taxpayer Advocate’s report highlighted the challenges faced during this atypical filing season, describing it as a “perfect storm” for taxpayers, tax professionals, and the IRS alike. The report also emphasized the importance of patience, advising taxpayers who can afford to wait to give the IRS time to address the backlog.

However, it acknowledged that for low-income taxpayers and small businesses operating on the margins, refund delays can cause significant financial strain. For these taxpayers, the ability to be patient is often a luxury they cannot afford.