After IRS Tax Refund Delays, Should You Bother to File in 2021?
People who are civic-minded usually start thinking about filing their taxes around this time, as the year draws to a close. For millions of taxpayers who have not yet received their refunds for 2020 and even 2019, it might be time to give up and ask themself ‘why bother?’.
After a tax season marred by unprecedented delays and mass backlogs, that’s the question many people have been asking themselves. It isn’t uncommon to see posts like this one in online forums dedicated to the issue, where one taxpayer declares, “I don’t do my 2021 taxes if I haven’t received my 2020 taxes.” Such posts attract more than 80 comments in less than a day.
A letter recently sent by the National Society of Accountants urging the Internal Revenue Service (IRS) to speed up its notoriously slow processing is understandable, given the frustration.
“Frustrations within the tax and accounting professional community are at an all-time high, and fears among practitioners about how the upcoming 2022 tax filing season will unfold, when many 2019 and 2020 tax returns remain unresolved, are based firmly in reality,” the letter states, according to Accounting Today. Charles Rettig, IRS commissioner, and members of Congress received copies of this letter.
Several factors contribute to IRS delays, including shoddy office equipment, the effects of the Coronavirus pandemic, and on-the-fly tax law changes. The Taxpayer Advocate Service admitted defeat in a recent blog post, saying that taxpayers have no recourse because they’re in “suspense status,” meaning that their forms haven’t been entered into the IRS system yet.
As a result, there are instances where refunds may be delayed due to tax circumstances that were unique to 2019 or 2020. This could mean you acquire your 2021 refund before you receive your 2019 or 2020 refund-but only if you file in 2022.
There have been several examples of taxpayers describing precisely that type of situation in posts asking why to bother with the tax return. Several individuals claimed to have received their 2020 refunds while their 2019 refunds remained in processing limbo.
To be clear, filing taxes for next year is still recommended. While it may seem pointless, you may actually receive your refund within the IRS’s 21-day window. Furthermore, you won’t have to pay a late penalty.