Is so embarrassed about returning the file (7)
I believe the answer is:
dossier
'the file' is the definition.
(thesaurus)
'is so embarrassed about returning' is the wordplay.
'embarrassed' becomes 'red' (I've seen this before).
'about' means one lot of letters goes inside another.
'returning' shows that the letters should be reversed in order.
'is'+'so'='isso'
'isso' inserted into 'red' is 'reissod'.
'reissod' back-to-front is 'DOSSIER'.
(Other definitions for dossier that I've seen before include "Record" , "File of documents" , "Papers containing detailed information about someone" , "File of papers (sometimes dodgy)" , "Papers containing detailed information about a particular person" .)