IRS Tax Refunds Delayed

The IRS still delivers tax refunds to individuals who filed their returns this past April. This is a massive inconvenience to many, and some taxpayers need to get the benefits that they deserve. Whether you’re missing a check or receiving one you’ve been waiting for, you can be sure that there are some steps you can take to make things easier for yourself.

Missing information on tax returns

More information on IRS tax returns is needed to avoid refund delays for many taxpayers. According to a report issued by the IRS, the backlog of unprocessed individual and business tax returns grew by 1.3 million during the year’s first nine months. This is a substantial increase compared to last year when the IRS had just over eight million unprocessed returns.

Various problems can cause missing information on your IRS return. These may include missing forms, a lost tax return, or a delayed processing time. If you need help processing your tax return, check your local IRS office to see if they can help you. You can also contact the tax software provider you’re using to find out if they can provide you with a form to file for your refund.

Another problem that can cause refund delays is identity theft. The IRS reports that 2.9 million identity theft cases were reported in mid-December. While most of these claims are fraudulent, the agency warns that some will be true.

COVID-19 pandemic

The IRS still needs help to process millions of tax returns. As a result, taxpayers will likely face a longer wait for their refund. In addition, the IRS has added online tools to help taxpayers manage the financial impact of the coronavirus pandemic.

During the filing season last year, the IRS had a backlog of unprocessed returns. Those returns were a mix of individual and business taxes. This is expected to continue this year.

The IRS had an estimated 6.5 million paper tax returns and e-filed returns that remain in suspension. Those returns are awaiting correction and special processing. Several of the returns involve identity theft and other problems. They may take 4 to 6 weeks to process.

One of the primary reasons for the delays is the backlog of paper returns. Paper returns are processed more slowly than electronically filed returns.

To make up for lost processing time, the IRS extended the filing deadline by two months. However, the extension does not extend the lookback period.

Social distancing

The Internal Revenue Service (IRS) has been in the news of late. The IRS has received more than 160 million stimulus checks, making it an essential player in the national economic picture. As the tax filing season approaches, expect some teething issues. One of the biggest hurdles for the IRS is the backlog. As of February, there were approximately 3,500,486 paper returns in the system. This means that the average refund is just over $3,064. It may be time to consider filing early. Luckily, there are some solutions.

First and foremost, consider taking advantage of free and low-cost tax preparation services. Several of these have been located in the Denver area. Tax attorneys in the metro area are also on high alert. In addition, the IRS has a number of tax filing centers located in major cities around the country. Most of these are open to the public, though some may be limited to a few hours a day.

Paper processing effort

The IRS continues to face long-term challenges regarding its backlog of unprocessed paper tax returns. As of October, 6.2 million individual paper tax returns were waiting to be processed. There are also millions of business tax returns stuck in the backlog.

The IRS has been forced to take action on this backlog to keep taxpayers from suffering. In addition to cutting down on the flow of paper documents, the agency has developed efficiency improvements and reassigned workers to help process new and amended returns. However, errors crop up along the way.

According to the National Taxpayer Advocate (NTA), the IRS needs to make adequate progress in reducing the backlog of paper returns. Some experts suggest more needs be done before the next filing season.

The IRS estimates that a combined correspondence and return processing delay can exceed a year. That is why it creates a 700-person surge team to help process new and amended returns. It is also transferring existing employees to other duties.

The Internal Revenue Service is delaying certain tax refunds in 2024. However, this isn’t a thing with all taxpayers. Taxpayers that claimed the earned income tax credit and/or the additional child tax credit on their federal income tax returns are subject to these delays. This is because federal law requires the Internal Revenue Service to hold tax refunds of taxpayers that claimed these credits.

Since this is not something you have control over as a taxpayer, all you can do is wait. 

As for how long to wait, here is everything you need to know.

IRS Refund Dates

The PATH Act, also known as the Protecting Americans from Tax Hikes Act, doesn’t permit the IRS sending tax refunds to taxpayers that claimed the earned income tax credit and the additional child tax credit. 

The tax refunds of these taxpayers will be sent around March 1, although the date on the IRS website says February 19. If you claimed these credits, you must wait until February 19, then check your tax refund status to see if it’s sent. Nevertheless, the chances are it won’t be sent and will be held until March 1. 

After March 1, you’re likely to get your tax refund right away, and it shouldn’t be something that takes a while. If you select the direct deposit option on your federal income tax return, you’ll get your tax refund relatively fast. It shouldn’t take any more than a few days. 

It’s a somewhat different scenario with paper checks. You can expect to wait around four days to a week for the check to arrive in the mail. 

IRS holding tax refund – status unchanged

Until March 1, the status update on the Where’s My Refund tool may not change if the above applies to you. Claiming the EITC and ACTC makes you subject to these waiting times. Make sure that you check the refund status as often as you can and see if there are any changes – do these after March 1, of course. Otherwise, you won’t see any changes in your refund status as the IRS is holding your refund.