Backlogs and Unprocessed Returns Demand Answers
According to a new report released by the National Taxpayer Advocate, in December 2021, the IRS had 6 million unprocessed individual tax returns and 2.3 million unprocessed amended individual tax returns. It also had backlogs of 2 million unprocessed employee quarterly tax returns and roughly 5 million pieces of taxpayer mail, some dating back to April.
Many taxpayers are still left with unanswered questions, some even nine months after filing. Since the pandemic began, CWA Tax Director Kristina Yarbrough is seeing most amended returns take around 52-65 weeks to be processed.
“Many of our clients are getting IRS notices in the mail asking for payments that they do not owe,” Kristina says. “Refunds are being delayed and amended returns are taking months to process.”
Attempts to call the IRS have been futile.
Kristina agrees, “On behalf of our clients, we’ve tried countless times to call the IRS and ask what is going on. When we are able to get a live person on the phone, the answer is always the same, ‘Sorry. I see it’s assigned to someone, but it will just take time.’”
Individuals are not finding luck online either.
Americans visited the IRS website to learn the status of their tax refunds more than 630 million times in 2021, a number that reflects deep frustration with the speed and efficiency of the tax collection agency, according to the National Taxpayer Advocate report.
WHAT CAN TAXPAYERS DO?
Taxpayers are frustrated. The CPAs that support them are too. Unfortunately, the majority of these returns just need to make it through the IRS’s processes, leaving it out of taxpayers’ control.
Kristina does offer the following suggestions:
- While your amendment is pending, if you receive a notice that says you owe money, contact your CPA. They will call and ask the IRS to put a hold on the account. This will stop the IRS from sending collection notices and the dreaded “intent to levy” scary notice.
- If you have an amended return with a refund, level set your expectations. Do not expect to get the refund for at least 6-12 months after the IRS received the amended return.
- Note: The IRS does pay interest on money they owe you. Taxpayers will earn interest while they are waiting.
- Continuing to call will likely not speed up the process. The return is processing, and a letter will be sent when they are finished.
- Want your refund quicker? Do direct deposit. Assuming you have no issues on your return, once it is processed, your refund can direct deposit in 21 days.
- A paper check refund can take anywhere from one to four months to receive.
- Note: You cannot do direct deposit on an amended return.
PREPARING FOR NEXT TAX SEASON
This year’s tax season began Jan. 24, 2022 when the agency started accepting 2021 returns. The IRS is urging Americans to file their 2021 tax returns online as soon as possible to avoid delays in processing and receiving refunds.
- Electronically file all returns. The CWA tax department e-files all tax returns that they can for our clients. This helps with any delays and will speed up the refund process as well.
- Pay the IRS online. View their website to set up the payment. Following the instructions will lower the chance the IRS will mis-apply your funds.
Albeit frustrating, know you are not alone. Because the IRS is taking more time processing amended returns, refunds will take longer, too. So be prepared for a wait.
In times of uncertainty, it’s helpful to have a tax accountant on your side. CWA provides a full range of comprehensive tax services through our in-house tax department. Reducing your tax burden plays a vital role in reaching long-term financial goals. Contact our team for a complimentary tax consultation.