Fixing the IRS: Paper Addiction Remains Agency’s ‘Kryptonite’

The IRS is drowning in paper, facing a backlog of millions of unprocessed tax returns even though the overwhelming majority of Americans file electronically.

Piles of unopened tax documents built up at IRS processing centers that shut down early in the Covid-19 pandemic. The agency initially aimed to clear the backlog in advance of this year’s tax filing season, but as it struggled to catch up, new returns piled on top of uncompleted older ones, putting processing still further behind.

Some taxpayers have waited months to receive their refunds, contributing to the billions of dollars in additional interest the ...