An IRS official speaking at a Federal Bar Association virtual meeting on March 3, 2021 said that three of the IRS’s service centers are facing new mail backlogs due to winter storms and quarterly return filings. The official, De Lon Harris, deputy commissioner for examinations, Small Business/Self-Employed Division, couldn’t estimate how long it would take the IRS to process its incoming mail.
According to Harris, the IRS is processing payments received immediately. The IRS’s top priority for submissions to process are 2020 tax returns claiming refunds, he said.
However, Harris also said that the IRS’s Austin, TX, Kansas City, MO, and Ogden, UT service centers are a couple of weeks behind in opening mail due to a combination of closures due to the winter storms (Austin) and taxpayers filing quarterly business returns that were due at the end of January (Kansas City and Ogden). The fourth service center, in Fresno, CA, is opening mail the same day it’s received, Harris said.
When asked about the processing of net operating loss (NOL) carryback claims, which are supposed to be processed within 90 days, Harris noted that the COVID-19 pandemic is continuing to cause processing delays, “but we no longer have these semi-truck trailers sitting at the campuses full of mail like we did several months ago.”
The IRS likely received more NOL carryback claims than usual in 2020 because the Coronavirus Aid, Relief, and Economic Security (CARES) Act (PL 116-136; March 27, 2020) allows business with NOLs incurred in 2018, 2019 or 2020, to carry back those NOLs five years so they can get a refund of previously paid taxes.