2025 season leaves 8.2 million unprocessed returns and a backlog of 750,000 correspondence cases.
return type |
scanned by april 18 |
|---|---|
form 1040 |
~1% |
form 940 |
~9% |
form 941 |
~13.5% |
far behind digital processing goals.
by 卡塔尔世界杯常规比赛时间 research
despite modernization efforts, the irs is drowning in paper, which the national taxpayer advocate calls the agency’s “kryptonite.”
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during the 2025 filing season, the irs scanned fewer than 1 percent of paper-filed forms 1040, falling drastically short of its paperless processing initiative goals. this continuing reliance on paper adds months to the processing cycle. in addition to return delays, it clogs the system for identity theft resolution, amended returns, and refund claims, each requiring manual review. for tax professionals, the paper problem means longer timelines, more uncertainty, and higher support costs.
according to the advocate’s 2026 objectives report to congress, the irs is projected to process all paper-filed returns and information forms by 2025 digitally. however, as of april 18, only 6 percent of all paper returns had been scanned, including about 1 percent of form 1040s, 9 percent of forms 940, and 13.5 percent of forms 941. the agency remains years away from true end-to-end digital processing.
the result is a backlog of more than 8.2 million unprocessed returns and a growing inventory of nearly 750,000 correspondence cases, creating significant burdens for taxpayers and practitioners alike.
still, that’s an improvement from 2022, when the irs faced a significant backlog of over 21 million paper tax returns. by 2023, the number had decreased to 1.9 million, indicating substantial progress in processing returns, gains that floundered in 2025.
these fluctuations underscore the irs’s struggle with paper processing and the need for continued modernization efforts to handle tax returns efficiently.
the taxpayer advocate warns that the bottlenecks are not merely technological, but structural. while taxpayers can now upload documents through the irs document upload tool (dut), those documents are often printed and routed manually, negating the benefit of electronic submission.
collins recommends that the irs publicly disclose a full timeline and scope for achieving end-to-end digitization. that includes integrating scanned data with backend systems for automatic routing, resolution, and real-time case tracking.
“true modernization would provide an it solution from the time the paper arrives at the irs through the backend processing of the return or correspondence,” collins wrote. until then, the agency’s kryptonite will sap its efficiency—and its service to taxpayers.