The Treasury Inspector General for Tax Administration says the IRS is sitting on 73.2 million individual cases in which someone appears to owe a tax return for one of the last five years and has not filed one. Most of that backlog built up while the agency’s usual nonfiler notices sat idle for years at a stretch during and after the pandemic. Only a small slice of the pile is being actively worked right now, which means it keeps growing faster than the IRS can chase it down.
Five Tax Years, 73.2 Million Open Cases
At the end of fiscal year 2025, the IRS had identified 73.2 million potential nonfiler cases spanning tax years 2019 through 2023. Tax year 2023 alone accounts for 24 million of those cases, or 32 percent of the total inventory, which leaves the remaining 49.2 million spread across tax years 2019 through 2022.
That figure comes from a TIGTA compliance report released August 26, 2026, and it describes an inventory count, not a final determination that all 73.2 million people owe money. Each case means IRS records show income reported by an employer, bank, or other third party, but no matching return ever arrived; some filers may ultimately owe nothing once deductions and credits are counted, and the count can include cases that simply carried over from one year to the next while paperwork sat unresolved. Nonfiler work at the IRS is split across two functions: the Collection side handles the notices and the automated substitute-return program, while revenue agents and examiners in the Examination function are separately assigned high-income nonfiler cases, with the Small Business/Self-Employed Division carrying most of that responsibility.
The backlog sits inside a larger number the IRS tracks every year: the agency’s most recent research estimates a $696 billion gross Tax Gap for tax year 2022, the difference between what taxpayers owe and what actually gets paid on time. Unfiled returns account for $63 billion of that total, smaller than the $539 billion attributed to underreported income on returns that were filed and the $94 billion tied to reported-but-unpaid tax, but it is the component most directly represented by the 73.2 million open cases in this report.
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Why The Backlog Piled Up During The Pandemic
The IRS paused its automated nonfiler notices intermittently from fiscal 2020 through 2022, then stopped sending them entirely for all of fiscal 2023 — the same processing shutdowns that emptied IRS campuses during COVID also shut off the letters that normally nudge someone to file. The agency restarted the return delinquency notice process in February 2024, alongside a new push aimed specifically at high-income nonfilers. That two-to-three-year gap is a big part of why the case counts for tax years 2020 through 2022 are still so large: the IRS simply never got around to telling millions of people their return was missing, so the inventory sat there accumulating.
How Many Notices Actually Went Out
The restart has been gradual. The IRS sent zero nonfiler notices in fiscal 2023, about 1.7 million in fiscal 2024 (mostly covering tax years 2020 through 2022), and roughly 3.2 million in fiscal 2025, most of them for tax year 2023 returns. Add those two years together and the IRS has touched fewer than 5 million of the 73.2 million cases it has identified. At that pace, working through the existing backlog alone, before counting the new tax years that get added every filing season, would take years even if notice volume kept climbing.
The harder-edged part of nonfiler enforcement has not kept up at all. Revenue officer compliance sweeps, the targeted assignments Field Collection normally uses to work high-priority inventory such as high-income nonfilers, were not conducted anywhere in the IRS during fiscal 2025 because of resource limitations. That leaves the automated notice stream as, for now, the only enforcement tool the agency is actively running at scale against this backlog.
What A Missed Filing Year Can Cost A Household
For anyone who skipped a filing year, the practical risk is not only a letter in the mail — it is money that can quietly disappear. The IRS holds any refund tied to an unfiled return, and taxpayers generally have only three years from the original due date to file and still collect it, a rule that also applies to refundable credits such as the Earned Income Tax Credit, according to the agency’s own guidance on filing past due tax returns. Miss that window and the refund is gone for good, regardless of how legitimate the claim was. On the other side of the ledger, someone who owes money on an unfiled return keeps accruing interest and failure-to-file penalties every month it goes unaddressed, whether or not a notice has arrived yet. The same IRS guidance notes a less obvious cost for anyone self-employed: income that is never reported on a filed return also never gets reported to the Social Security Administration, so it does not count toward the work credits that determine eligibility for Social Security retirement or disability benefits later on.
A Shrinking Enforcement Staff Is Working Through It
The IRS publishes its own year-by-year account of enforcement staffing and casework in its annual Data Book, and the trend TIGTA found lines up with what that publication shows: combined examination and collection staffing fell from 27,217 employees at the end of fiscal 2024 to 19,612 at the end of fiscal 2025, a 27 percent drop tied to the federal government’s broader workforce-reduction push, and kept falling to 17,517 employees by January 10, 2026. Fewer staff generally means slower casework, which cuts two ways for someone with an old return still unfiled. It may buy more time before a notice arrives, but it does not stop interest and penalties from building in the meantime, and it does not shrink the eventual bill once the IRS does get around to it.
TIGTA made no recommendations in this compliance report, describing its purpose as informational rather than corrective, and IRS officials who reviewed the draft agreed with its facts and conclusions. The inspector general’s office has raised the broader nonfiler problem in earlier, separate reviews, including a 2020 report finding that high-income nonfilers owing billions of dollars were not being worked and a 2023 report concluding the IRS had not adequately prioritized nonfiler cases among its own federal employees.
What a stalled refund actually means
Each status message and each notice points to a different cause, and each cause has its own next step.
The IRS Refund Recovery Kit includes a 13-page kit, a notice decoder and the refund-trace steps (Form 3911).
Read the notice decoder in The IRS Refund Recovery Kit.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
