IRS REFUND DELAYS

Millions of Americans are still waiting for 2020 federal tax refunds – and some for 2019’s or prior years.

Every year for the last decade or so, tax season has gotten harder for IRS and for tax professionals – but 2020 & 2021 have been absolutely unprecedented. 

In June, IRS reported more than 35 million 2020 returns in the pipeline.  Presumably that included the several million others yet to be finalized from 2019.

Why?  COVID, mostly, but in particular:

  • The already-understaffed IRS had to switch its workforce to virtual (like everybody else) but the effort was compounded by its outdated computer systems.

  • IRS processing centers closed for months (March to October) with resultant mail backup.

  • Stimulus payments – which became IRS priority #1 each time Congress acted.

  • Multiple changes to the tax code requiring new forms and reprogramming – including during tax filing season.

  • Longer term, IRS funding has been cut 10%+ over recent years, leading to lower staffing levels and overwhelmed call centers.

  • More returns have been filed to qualify for stimulus payments or Advance Child Tax Credits.

  • The deluge has been so intense that one source reports that IRS servers have been unable to download all the electronic returns to even begin processing!

I did my (usually quite good) best preparing your return, but yours may part of the IRS backlog. I’m sorry if I’ve had to tell you that I couldn’t help.  When a return is in processing, even Practitioner Priority assistors can’t access the data.

If your refund has been delayed, several reasons are possible:

  • a Recovery Rebate Credit (stimulus make-up);

  • suspicion of identity theft or fraud; or

  • an Earned Income Credit or other claim that may trigger manual review.

You should check Where’s My Refund at irs.gov periodically for updates, or Where’s My Amended Return?  Ignore the stated timeframes on the website; those are for “normal” times.

In general, you should not plan to call IRS unless you have an potential identity theft notice (CP-14) which goes to a special department.  If you are one of the lucky few to get through at 1-800-829-1040, the likely wait will be 2 hours. I may be able to do better, depending on the problem.

If you receive any correspondence from the IRS regarding your return for 2020 or a prior year, call or email but please don’t email the notice – it includes your Social Security Number!  Upload it to the portal, fax it to me or mail me a copy and I can guide you through the options. Due to the delays in opening mail &/or processing, some notices are being sent by the IRS despite timely follow-up.  Unfortunately, patience is sometimes our only option.

Please feel free to call or email to discuss your particular challenge.

Clare Fazackerley