Tax refund delays: Here are some of the reasons it may be happening
INDIANAPOLIS (WXIN) — Just over one month has passed since the Internal Revenue Service (IRS) began processing tax returns, but delays are already being reported by many who filed their taxes.
Between meeting the demands of processing a third round of stimulus payments, recent changes in tax laws, and backlogs due to the pandemic, many people are waiting weeks for an update on the status of their tax refunds.
“I filed February 12th and, you know, got accepted a couple days after,” said Monique Ray, who lives in Indianapolis.
Ray said she confirmed through the IRS’ Where’s My Refund tool that her payment had been accepted, and soon after, the status bars on the website disappeared.
“I got a message on the Where’s My Refund saying that ‘your refund is still being processed and a date will be given when available,’” she explained. “It’s still saying that to this day.”
This past year, Ray lost her son just 51 days after he was born. Adding to the financial challenges she faced after his passing, she said she recently lost her job.
Ray said she has been unable to reach anyone at the IRS to find out how much longer it will be before she can get the money she worked all year for.
“It’s really difficult, you know, trying to play catch up,” she said.
The IRS said they are dealing with a high call demand with millions of people calling in so far this tax season. They have about 13,760 phone assistors, including about 3,800 hired this filing season alone.
According to the IRS, a “typical tax refund with no issues goes out in 21 days or less.”
“It’s been over 21 days — beyond 21 days,” Ray said.
The IRS told NewsNation affiliate WXIN, “If there is an issue with a tax return that requires additional review, that can add time for some taxpayers, but it varies depending on the issue. Many factors can affect the timing of a refund.”
Experts say there are several other factors contributing to delays in tax refunds.
The IRS is working through a backlog of processing tax returns for 2019 submitted last year, along with continuing to work through the impacts of COVID-19, which created staffing shortages and closures.
“Everything that I hear and read from the IRS points really just to one issue and that is that they’re behind,” said CPA John Helms, who is the president of J.R. Helms and Associates.
“They’re still trying to catch up from last winter and into summer and early spring when they were shut down like a lot of businesses.”
Dozens told WXIN they filed their taxes and received notification they were accepted but are still seeing delays exceeding 21 days.
“I do not believe there’s anything wrong with current e-filings. It’s in the computer system,” said Helms. “It would seem the computer should be kicking those checks out but they’re just very behind.”
Once a tax return is filed and accepted by the IRS, there isn’t much a person can do besides wait and monitor the IRS’ website for the status of their refund.
“If it’s e-filed once it’s accepted unfortunately if you paid someone to prepare and e-file your return, they have no access to it at that point,” Helms explained.
He said there’s no back door tax advisors can go through to get answers on the status of a person’s tax refund and getting through to the IRS through long wait times might be difficult.
“It’s a bad situation, but unfortunately we’re all currently caught in it.”
To add even more on the plate of the IRS, it is currently working to process a third round of stimulus payments and deal with recent changes in tax laws.
“IRS employees are continuing to work hard to deliver tax refunds as soon as possible while also delivering critical Economic Impact Payments to taxpayers in record time,” said the IRS.
Helms said the information is rapidly changing when it comes to what people need to know as they file their tax returns this season.
“If it relates to the stimulus bill, the credits, the rebates, that information is changing daily,” he shared. “We may give you an answer today, and it may not be the same answer in two weeks, or even tomorrow.”
With the tax filing deadline extended to mid-May, Helms says he doesn’t believe it will extend wait times for refunds.
“I don’t see that it’ll help them, but I don’t believe that it will extend them,” said Helms.
“Filing will decrease over the next three or four weeks, obviously it’s only a month extension, but many people will take advantage of it,” he said, noting that this should lessen the volume that the IRS is dealing with.
Some question whether processing delays could increase if people who have already filed their taxes need to submit amended tax returns following up on recent changes, such as tax breaks.
“The IRS has actually come out and said do not amend your tax returns,” said Helms.
He said people who have already filed and have been taxed on unemployment are being advised not to file an amended return.
Helms said, “They haven’t explained whether they mean don’t file one yet or whether they don’t file one at all because the IRS thinks that they will correct it.”
Response from the IRS
WXIN reached out to the IRS for a statement on delayed tax returns and what people need to know. The IRS issued the following statement:
“IRS employees are continuing to work hard to deliver tax refunds as soon as possible while also delivering critical Economic Impact Payments to taxpayers in record time. This is an unprecedented time for the IRS given the pandemic, new tax laws and three rounds of stimulus payments. This scenario is unfolding at a time when the IRS has fewer resources and staffing than a decade ago.
The IRS knows this is a desperate time for taxpayers, and we continue to do everything we can to help. We continue to deliver tax refunds to people as fast as possible, with an average of more than 1 million refunds being issued every day to the nation’s taxpayers.
The IRS is handling more responsibilities at a time when its budget and staffing have been sharply reduced during the last decade. As the Congressional Budget Office and others have noted, the IRS budget and staffing is down about 20 percent – meaning the IRS has 20,000 fewer people available to help on tax season and other issues.
Tax refunds: A typical tax refund with no issues goes out in 21 days or less. Typically, nine out of 10 refunds filed electronically go out in this time frame. Through March 5, the IRS has issued 36 million refunds following the Feb. 12 start of tax season.
If there is an issue with a tax return that requires additional review, that can add time for some taxpayers, but it varies depending on the issue. Many factors can affect the timing of a refund. Common errors the IRS is seeing this filing season include people not reporting their Economic Impact Payments accurately on the Recovery Rebate Credit line. Tax returns with an error, incomplete information or those affected by identity theft or fraud may take longer to process. If more information is needed to process the return, the IRS will send the taxpayer a letter with a request for information.
Online tools help avoid delays: We urge people to visit IRS.gov and use tools like “Where’s My Refund” and “Get My Payment” for the quickest assistance. Filing electronically with direct deposit is the quickest way to receive a refund; it’s even more important during the pandemic to avoid filing a paper return if at all possible.
We are still working through the impacts of COVID-19, which created staffing shortages and closures. For example, our phone lines continue to be very busy with high call demand with millions of people calling in so far this tax season. We currently have about 13,760 phone assistors, including about 3,800 hired this filing season. We hope to onboard another 1,000 phone assistors using funding associated with the American Rescue Plan.”