This has been a rough year for interactions with the Internal Revenue Service. In fairness to the IRS, they are massively understaffed thanks to the Covid pandemic. That does not lessen taxpayer frustration with their lack of access and long waits for refunds. This is becoming a major national problem as evidenced by many media outlets. One of the better responses comes from the Kiplinger letter which we reprint below:
The Kiplinger Tax Letter
Vol. 96, No. 20
Service may be part of IRS’s official name…
But the agency has been lacking this lately.
It’s not all IRS’s fault. Credit the perfect storm of the coronavirus pandemic, lots of tax law changes, new relief programs for the agency to administer, years of budget cuts, and a shrunken workforce for the historic declines in the level of service by IRS to taxpayers and tax practitioners in 2020 and 2021.
Let’s take a look at the 2021 filing season.
Millions of individuals still await refunds from timely filed 2020 tax returns. As of Sept. 18, IRS had a backlog of 7.8 million individual returns that require manual processing. Some need further review because of mistakes with refundable credits or math errors. About 9 million math error notices were mailed to taxpayers from June 1 through July 15, compared with 628,997 for the same period last year. Others are paper returns filed this year that need to be manually processed by IRS.
The good news is that IRS is making progress on processing returns. As of June 25, there were 16.7 million 2019 and 2020 Forms 1040 waiting for action.
Amended-return filers also need lots of patience this filing season. As of Sept. 18, IRS had more than 2.8 million Forms 1040-X yet to process.
Unfortunately, there’s not much you can do if you’re affected by the delay, other than continuing to check the “Where’s My Refund” tool on IRS’s website.
Business tax return filers are being caught up in the turmoil, too.
IRS has 2.3 million unprocessed employment tax returns filed on Form 941.
And it is way behind on reviewing Forms 1139 and 1045. The CARES Act reversed the general ban on carrybacks of net operating losses by requiring NOLs arising in 2018, 2019 or 2020 to first be carried back five years, unless the taxpayer elects to carry the NOLs forward. The law also expanded the 80% taxable income limit for utilizing NOLs for 2018 to 2020. After IRS temporarily let firms file claims via fax for quick refunds of NOL carrybacks or carryforwards, the agency was inundated with such filings, and it’s still experiencing longer-than-normal processing backlogs.
Want to call IRS for help with a tax question or to check on your refund?
You will be one of the lucky few if you can actually reach a live person. So far in 2021, only 9% of callers reached a live customer service representative. One reason for this dismal level of service is the historic number of callers. IRS has received over 200 million calls on its various phone lines so far in 2021, more than five times the usual number. In addition to the normal callers every year, people are calling IRS often and repeatedly about their delayed refunds, the status of their stimulus payments or monthly child tax credit payments, how to account for the numerous retroactive tax changes, and so much more.
You might have better luck if you call this fall, say, in late Oct. or Nov.
But don’t expect a detailed answer if your query relates to a delayed refund. The operator typically can’t say much beyond what you can see on “Where’s My Refund.”