By Kevin Theissen
The Internal Revenue Service continues to be backlogged and shorthanded—because of years of mismanagement plus Covid-19 related difficulties. As of last month, the IRS had over 20 million tax returns and correspondence waiting to be processed. Last year there were over 150 million taxpayer calls to the IRS that went unanswered.
If you are in the majority of taxpayers that file electronically, you can likely expect your tax refund to appear in your bank accounts within a few weeks. However, tens of millions won’t be so lucky. The IRS has projected that nearly 21 million electronically filed returns could be delayed this tax season because of discrepancies related to changes Congress made in the refundable child and dependent care credits. That’s on top of millions of other returns that will get kicked out of the IRS’ normal computer processing stream for some other reason.
There is a “Where’s My Refund” page on the IRS website that can tell you if your return was received, or your refund was approved or that a refund has been sent. However, it won’t tell you if there is a problem, delay or how to resolve any issues. It won’t, for example, tell you that your return was kicked out of normal processing for some discrepancy.
Unique for this tax year, the IRS sent a 2021 Total Advance Child Tax Credit Payments letter informing families with children how much in advance 2021 child tax credits the IRS had paid them. This would cause delays if you changed your bank account, moved late last year or if the amount doesn’t match what you actually received.
If there are issues with filing electronically, you could still send in a paper return but this will significantly delay your refund. If you need to call the IRS for anything, good luck. The IRS projects it will answer 35% of calls this season—an improvement but still not great. The recently signed $1.5 trillion federal spending bill gives the IRS more money for taxpayer service and takes $75 million from its enforcement fund to process backlogged returns. The new spending law also grants the IRS authority to speed up hiring of 10,000 new employees—if it can find them. That won’t be much help to taxpayers waiting for their delayed refunds from the “Where’s My Refund?” section on the IRS website.
Kevin Theissen is the owner and financial advisor of HWC Financial in Ludlow.