With the May 17th Tax Day having finally arrived on Monday, some taxpayers should prepare for what could be an unusually long wait to get their refunds.
For this tax filing season, the IRS expects to receive about 160 million tax returns, with about 40 million of those arriving on or shortly after the May 17th deadline. According to the U.S. Treasury Inspector General for Tax Administration (TIGTA), most of the workforce at the IRS is still teleworking. However, some tasks cannot be done remotely. Many returns require manually inputting information into the IRS systems or correcting errors, and although processing centers are open, they are currently not operated at full capacity because of social distancing requirements. We have already seen a delay in the 2020 transcript information for clients who may be trying to locate missing information.
Even before tax filing deadline, the IRS had already experienced a backlog of more than 30 million returns that still needed processing, according to the Taxpayer Advocate Service. The massive backlog has caused a mix of unprocessed 2019 returns, the processing of which was severely delayed by the closure of many IRS offices last year due to the pandemic, and 2020 returns that have been stacking up earlier in the year. The flood of new returns on Monday is expected to add fuel to an already strong burning fire.
The unfortunate part about this is that there is not much a taxpayer can do to speed up the process. Unless the IRS is requesting documents or more information, taxpayers can only wait and monitor their refunds via the “Where’s My Refund” tool at irs.gov. For taxpayers that have not filed their return, we advise that you ensure the accuracy of your returns to avoid any delays during processing which may potentially cause additional delays and frustration.
If you have any questions about these issues the impact this may have on your situation, or if you require any other assistance with your tax planning and/or compliance needs, please do not hesitate to contact one of our knowledgeable team members.