Some tax refunds may be delayed this year. Here’s why.

Three weeks before the official end of the tax season, the IRS has issued nearly 50 million in tax refunds. But many others are still waiting for a refund. In addition, the agency has one The delay of about 7.5 individual statements it is being processed from previous years, much more than the million it usually has in a tax season.

Here’s why some returns it could take longer this year, and what taxpayers could do about it.

Why could the tax refund be delayed?

There are a number of reasons why a refund may be delayed. Mathematical errors or simple typographical errors are often responsible. Common errors that the IRS has marked as a cause of delays include: selecting an incorrect presentation status; forget to list all income, including bank interest and unemployment compensation; not answering a question about cryptocurrency trading; or misspell your name, address, Social Security number, or bank account number.

This year, pandemic economic impact payments, also known as stimulus checks, are creating an additional hurdle for taxpayers, causing a “significantly higher error rate” in returns, according to the commissioner of the IRS Charles Rettig.

Users must enter the stimulus payments they received correctly and the numbers must match the IRS records. However, “well over 10 million” Americans have made inconsistent figures, prompting delays, Rettig told Congress last week.

Other delays are due to Congress changing the tax law to allow Americans to use 2019 or 2020 income to claim the tax credit for labor income. The change came after the IRS had already updated its computer systems for fiscal year 2021, Rettig said, meaning taxpayers who take advantage of the law will have to manually review their returns. by an IRS employee.

According to Rettig, the shortage of staff is also affecting, with a reduction in the workforce at the IRS close to levels not seen since 1974.

In addition, the IRS is taking longer to issue refunds for some returns filed in previous years, the agency said. The IRS website states that some 2020 tax returns take longer to process and refunds take more than 21 days to issue.

How long will refunds be delayed?

In typical years, the IRS issues most refunds within 21 days of processing a tax return. This year, tax professionals are not optimistic about this time period.

“You won’t get your money back in two weeks, so don’t expect unrealistic expectations,” said Robert Seltzer, a Los Angeles-based CPA.

Even the IRS warns taxpayers that they may have to wait. The agency on its website “warns taxpayers not to rely on receiving a refund on a certain date, especially when making major purchases or paying bills.”

Seltzer advised taxpayers to start checking their refund status online three weeks after filing their return.

I submitted an amended statement for the past year: What should I do?

The IRS said it would take longer to process tax returns for fiscal year 2020 and up to another month to process the amended returns.

“We are taking more than 20 weeks (instead of up to 16 weeks) to process the modified returns,” the agency said instead. “Don’t file a second tax return or call the IRS,” the agency said.

Taxpayers who have filed an amended return should be able to verify their status online with the IRS as soon as about three weeks after submitting the return to the agency. It can take up to 20 weeks, or five months, for a refund to be processed.

Seltzer has several customers still waiting for refunds from fiscal year 2020, one of which was filed in late July. One of them had no choice but to present it on paper, which prolongs the issuance of a refund, he said.

“You really have to take all the steps you can to file electronically, because paper returns literally go into a black hole; it takes an eternity to process them,” he said.

Unfortunately, modified returns are often the last priority for the IRS, even more so during a busy presentation season, said financial columnist Michelle Singletary.

How can I find the status of my refund?

The IRS’s “Where’s My Refund” tool allows taxpayers to check the whereabouts of their refund.

To verify this, taxpayers will need their Social Security number or individual tax return number, tax return status, and the exact dollar amount of the refund. The information is updated 24 hours after someone has submitted their return electronically and the status of the returns is updated once a day, usually overnight, according to the agency.

However, the tool is limited, the National Taxpayer Advocate noted in his latest report, because it does not explain the reason for a delay or what a taxpayer has to do to resolve a backlog.

When should I call the IRS?

Taxpayers hoping to get a person over the phone will face a tough battle. Last year, the agency only answered 1 in 9 phone calls, with an average hold time of 23 minutes, according to the National Taxpayer Advocate.

The IRS says taxpayers should call about their refund in just a few circumstances:

• When more than 21 days have elapsed since the return was filed electronically.

• When six weeks or more have elapsed since the return was sent.

• If “Where is my refund?” The tool instructs someone to contact the IRS.

In:
• internal revenue service
• IRS
• tax refund