IRS says some tax refunds may be delayed

April 24 (UPI) -- The Internal Revenue Service is holding 29 million tax returns for manual processing according to an independent arm of the agency.

The move could delay tax refunds for many Americans, according to the National Taxpayer Advocate.

USA Today reported that of the nearly 30 million returns being held for manual processing, more than 8 million individual returns were in "suspense" status awaiting review and manual processing as of April 9.

"Typically, the IRS processes electronic returns and pays refunds within 21 days of receipt," said a blog post on the advocate's website. "However, the high volume of 2020 tax returns being filed daily, backlog of unprocessed 2019 paper tax returns, IRS resource issues, and technology problems are causing delays."

The IRS was unable to process the 2019 returns after shuttering its offices last spring due to the COVID-19 pandemic, and also posted a notice in March saying some returns may be delayed if they need a correction made by the Recovery Rebate Credit or to verify income for the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC).

The $900 billion stimulus package signed into law in December didn't leave the agency much time to prepare for some of its tax code changes, including an "income look back" rule that allowed taxpayers to use their 2019 income to calculate their eligibility for the Earned Income Tax Credit or the Additional Child Tax Credit on their 2020 tax return.

In a separate post, the National Taxpayer Advocate noted that the IRS has processed more than 91 million individual returns and issued more than 68 million refunds -- as well as issuing 161 million payments for the third stimulus check over the past several weeks -- meaning it has processed far more tax returns than not.