Tax returns are piling up at the Internal Revenue Service, and
millions of taxpayers are experiencing refund delays beyond the
typical 21 days or fewer for e-filed returns electing a direct deposit
refund. The IRS even issued a press release cautioning taxpayers not
to count on getting a refund by a certain date, especially when making
major purchases or paying bills.
On its operations page update today, the IRS posted that as of March
25, it had 7.2 million unprocessed individual returns, including 4.9
million with errors or needing special handling (paper returns, for
example). Both numbers have ticked up since last week by 200,000,
suggesting that more returns are going into the “to do” pile as tax
day nears.
The good news is that the latest tax filing statistics as of March 25
show that the IRS has processed nearly 79 million individual tax
returns and issued nearly 58 million refunds, averaging $3,263. So
lots of returns are going through smoothly.
“People are always trashing the IRS technology, but the technology is
what’s working best,” says Mark Everson, former IRS commissioner and
vice chairman of alliantgroup. “If you file a clean return and ask for
a direct deposit refund, you’re going to get it quickly. Where they’re
struggling is those things that require human intervention.”
Waiting for a refund? The best way to check on the status is with the
IRS Where’s My Refund? tool. You’ll need to plug in your Social
Security number, filing status, and expected refund amount. A “refund
status results” bar gets filled in as your return moves through the
process: return received, refund approved, refund sent.
Just because you look one day and see “return received,” that doesn’t
mean you’re in the clear. Instead of moving on to “refund approved,”
the Where’s My Refund? page can flip to show this message: “We
apologize, but your return processing has been delayed beyond the
normal timeframe.”
What does that mean? A manual IRS review may be necessary when a
return has errors, is incomplete or is affected by identity theft or
fraud. What kind of errors? It could be anything, but it’s likely the
message is coming up because of the common confusing issues this year
of reconciling advance economic stimulus payments and/or advance child
tax credit payments, says Claudia Hill, an enrolled agent in
Cupertino, Calif.
There’s really nothing you can do at this point, but recognize that
“you’re caught in delayed processing purgatory,” she says. In some
cases, the IRS says, this work could take 90 to 120 days (13 to 17
weeks). And it’s taking more than 20 weeks to process amended returns.
The 4.9 million returns include prior year returns too, so some
taxpayers are still waiting for their 2020 tax year refunds. There’s
the backlog of returns, a backlog of correspondence, and the fact that
it’s hard for tax pros to reach the IRS by phone.
“The IRS has it in its power to correct the backlog, and they need to
do that because it compromises the integrity of the system,” says
Everson. “I’d like to see them bring everybody back into the office
now, and everybody except criminal investigators should be addressing
backlogged returns.”
The IRS has been shifting employees from other duties to help address
the backlog and delays. It’s also hiring.