Over the past 18 months, many taxpayers have felt like they are on a lengthy sea voyage when it comes to the processing of their 2019 and 2020 returns. The Taxpayer Advocate Service’s recent report to Congress commended the IRS for its efforts in processing tax returns despite the challenges created by COVID-19, but it also highlighted the backlog of returns continuing to plague the agency.
According to the Taxpayer Advocate, close to 17 million 2019 returns and 35 million 2020 returns are still waiting to be processed. Myriad issues created this perfect storm, including the closing of multiple IRS campuses, reduced capacity at all locations upon reopening, additional responsibilities related to economic stimulus payments, the implementation of multiple tax law changes, and more. Additionally, the backlog of returns filed for 2019 was only compounded when 2020 returns were filed, as they could not be processed until the prior year’s returns were completed.
In conjunction with the issues surrounding the processing of returns, many taxpayers have received computer-generated notices that provide outdated, incorrect, or irrelevant information. For the same reasons many paper-filed returns were not timely processed, payments mailed to the IRS faced related and sometimes severe delays. Many checks mailed on the date a return was electronically filed were not posted to accounts for months, thereby creating situations where taxpayers appeared to owe tax even though they had long since made a payment.
Finally, due largely to the issues surrounding the delayed processing of returns and receipt of incorrect notices, the IRS has faced increased calls on all its customer and practitioner service lines. Only seven percent of taxpayers were able to reach the IRS when they called the various customer service numbers. On the individual tax line, this amount dropped to three percent.
What Does This Mean To You?
Patience and more waiting. The IRS is working through the backlog and they will refund taxes, with interest, when these long-delayed returns are processed. If you are still waiting for a Form 1040 refund, you may check the status of your refund online at IRS.gov. However, when checking the “where’s my refund” tool, expect delays and status updates that may not be helpful. Cherry Bekaert, along with the AICPA, ABA, and other organizations of tax professionals, are navigating the waters by regularly communicating with the IRS, monitoring activity reports, and advocating for taxpayers at every opportunity.
