We look into the customer service and staffing issues at the IRS
Highlights of the article:
- Are you in for a long tax season?
- Avoiding delays in processing
- IRS processing time
- Don't procrastinate
- IRS customer service issues
- Your tax return status
- When will my federal tax refund arrive?
The IRS and taxpayers may face another difficult tax season this year. Despite the fact that this year's filing season begins on January 24, 2022 (i.e., the first day the IRS accepts and begins processing 2021 returns), the IRS still has a backlog of prior-year returns to process and is beset by staff shortages as a result of the pandemic and reduced funding in recent years. Even though the majority of 2020 forms were filed electronically, many of them required manual examination, causing considerable delays in refunds from the IRS. This was the situation for millions of 2020 returns submitted by taxpayers who got unemployment benefits and filed, before Congress implemented a statute exempting up to $10,200 of jobless income per filer retroactively (that provision has not been extended to 2021). Many returns required human assessment since the Recovery Rebate Credit had to be matched with the Economic Impact Payments #1 and #2.
Taxpayers who received Advance Child Tax Credit (ACTC) payments and/or Economic Impact Payment #3 (all of which must be reconciled on the 2021 return) are likely to face similar problems. As a result, it's critical to include the precise amounts received while reconciling to avoid return processing delays. In January, the IRS began sending taxpayers Letters 6419 (for the ACTC) and 6475 (for EIP #3), which provide the information needed to complete the reconciliation computations. Make sure your tax return preparer receives these letters. Processing delays, refund delays, and IRS notices can all be avoided by filing an accurate tax return.
But there is some good news!...
Despite reduced personnel and the ongoing epidemic, the IRS anticipates processing electronically filed returns and paying refunds (that will be directly deposited in the taxpayer's bank account) within 21 days after receipt of the return this tax season. While this time frame cannot be guaranteed, the sooner you file, the more likely you are to get your refund within that time range. If the IRS's systems discover a possible inaccuracy, missing information, or suspicions of identity theft or fraud, the IRS may need to communicate with the taxpayer, which will necessitate particular attention from an IRS employee. In that situation, the IRS may take longer than the standard 21 days to process any relevant refund. The IRS may correct a return without notifying the taxpayer, and the IRS will subsequently send the taxpayer an explanation.
The IRS is barred by law from releasing a refund from a return where the Earned Income Tax Credit or Additional Child Tax Credit is claimed until mid-February, to prevent fraudulent returns from being filed. This does not, however, prevent taxpayers from filing their forms earlier. Taxpayers will not have to wait for their 2020 returns to be fully completed before filing their 2021 tax returns; instead, they will be able to file whenever they are ready. So, if the IRS hasn't processed your 2020 return yet, don't let that stop you from preparing and filing your 2021 return.
Even if the IRS is a little over-capacity this season, the best advice is still to file your return as soon as possible.
Customer Service shortages at the IRS...
Aside from return processing issues, the IRS has faced customer service issues, including a shortage of IRS personnel to answer the phone in response to taxpayer concerns. Because of Covid-19-related tax changes and staffing issues, the IRS phone system received more than 145 million calls from January 1 to May 17, more than four times the number of calls in a typical year. Unfortunately, the IRS was only able to answer around 10% of those calls, and those who were fortunate enough to have their calls answered experienced unusually long wait periods before speaking with an IRS representative. Eeek! Glad I’m not in that office right now…
The IRS encourages individuals to search for solutions to their tax issues on the IRS.gov website rather than calling the Service, but this isn't always an effective substitute for speaking with a knowledgeable professional. Those who have their returns prepared by a tax expert have the advantage of being able to contact their tax professional with tax questions rather than trying to contact or deal with the IRS.
If you are currently a client with us, and you have questions, please click here to get tax advice from us! We can help you if you have been attempting to prepare your own tax return and need professional assistance. Don’t get stuck on hold to the IRS any longer! We’ve got the answers you need.
