The family’s largest check of the year often comes in the form of an IRS tax refund.
More than three-quarters of all Americans get a tax refund each year.
It’s possible the IRS will experience a snarl in processing this year’s taxes that mirrors last year’s, — when the agency held up refunds and returns for 30 million taxpayers.
According to CBS News, as soon as the IRS starts processing returns on January 24, tax season will be challenging, Treasury Department officials confirmed this on Monday.
There exist a significant backlog of returns from 2021, which accounts for much of the latter.
As of December 23 did the IRS had 6 million unprocessed individual tax returns.
Though, the backlog of 30 million returns in May has been reduced significantly.
Nonetheless, it is still higher than the 1 million returns typically left unprocessed at the start of tax season.
The IRS said on Monday that most Americans should receive their refunds within 21 days after filing taxes in 2022 – with some caveats.
Errors such as wrong math calculation or incorrectly reporting how much you received from the advanced Child Tax Credit payments, for example, may flag your tax return.
If this happens, it will cause your return to be delayed for weeks or even months.
The IRS is starting with a backlog this year, which makes it more challenging for taxpayers to get a quick refund.
Tax experts advise taxpayers to take a few steps to help ensure a quick refund.
Erin M. Collins, the National Taxpayer Advocate, warned Congress in a report on Wednesday that she is “deeply concerned about the upcoming filing season” due to the backlog, among other things.
“The first thing you know if you are going to cook a meal, you have to have the kitchen cleaned up from the last meal,” stated Mark W. Everson, vice chairman at Alliantgroup and former commissioner of the Internal Revenue Service.
“It just snowballs into a terrible situation.”
As Collins noted in her report, which described the agency in crisis, delays in processing tax returns are one of the agency’s biggest problems.
Additionally, tax preparers told MoneyWatch that IRS personnel are difficult to reach by phone.
The records have it that taxpayers were answered by the IRS only 1 out of every 9 times they called during the fiscal year 2021, Collins reported.
“Many taxpayers are not getting answers to their questions and are frustrated,” the official said.
“Back in the old days, you’d wait 5-10 minutes and get an IRS agent on the phone,” according to Christian Cyr, president, and chief investment officer at Cyr Financial.
In the meantime, he said, his CPAs have waited hours struggling to reach an IRS employee, and there is no guarantee they will reach one.
An average refund last year was around $2,800, so ensuring smooth tax filing comes with a lot of risks.
You can swiftly get a refund within 21 days of filing your tax return with these tips (below) from tax experts and the IRS.
Read More: Don’t Miss Out on $2,000 Child Tax Credit and January $300 Check
Submit Your Return Online
IRS strongly recommends this step this year. Taxpayers who file electronically are more likely to have their returns processed quickly.
IRS computers process electronic returns, while only human employees work with paper returns.
The IRS shut down its offices during the early stages of the pandemic and employees stopped opening mail, causing paper returns to be delayed.
Despite the pandemic strains, the IRS has not been able to keep up with its population growth.
The agency employs the same number of people as it did in 1970 despite the American population increased by 60%.
This only implies that fewer workers are used to manage a higher return volume.
In 2021, the Taxpayer Advocate Service reported approximately 10 million paper returns filed, or about 7% of the 148 million returns filed.
Approximately 138 million taxpayers currently use e-filing.
Tax experts urge other people who haven’t ventured into this filing medium to do the same.
National Taxpayer Advocate Stephen Collins said on Wednesday that paper returns are IRS’s Kryptonite.
Use Direct Deposit to Receive Your Refund
Taxpayers are also advised to arrange for a direct deposit of their refunds.
This is a faster way to receive your money; by combining e-filing with direct deposit.
Your money will be deposited into your bank account as soon as you file.
About 95 million taxpayers received refunds last year, 87 million of whom had their refunds deposited directly into their bank accounts.
IRS information said a taxpayer who files electronically and chooses direct deposit can expect a refund within 21 days, provided there are no problems with the return.
Do Not Guesstimate When Filing
Data from taxpayers’ returns are verified by the Internal Revenue Service.
If there is a discrepancy, an employee must manually review the return.
Your tax return is likely to be delayed by weeks or even months if this happens.
To ensure reporting data accurately, tax experts recommend people check their tax forms carefully and patiently.
Tax returns should not be based on “word of mouth or the honor system,” Cyr said. “I guarantee that will cause delays.”
The IRS Encourages Taxpayers to Keep Letter About Stimulus Fund
This month, the IRS will send letters to taxpayers who received their third stimulus check-in 2021, as well as advance payments for the Child Tax Credit.
They are important documents to hold onto, as you will need them when you file your tax return in 2022 to refer to the amounts you received.
A major reason for the delay in tax returns in 2021 was due to taxpayers making mistakes in reporting their stimulus payments on their returns, resulting in the need for a manual review of their tax filings.
“Don’t have any problems that are caused by your own negligence,” Everson urged.
You will receive two letters from the IRS:
- Letter 6419 — advising taxpayers of their CTC advance payments. These letters began to be sent out in December and will continue through January.
- Letter 6475 — information regarding the third stimulus check. You will receive that letter late in January.
These letters should be kept and referred to when you file your tax return.
Read More: Democrats Contemplate Ways to Resurrect the Child Tax Credit
If You Claim the Tax Credits, Delay May Occur
Even if you do everything correctly, there are a few issues that could delay.
Refunds involving the Earned Income Tax Credit (EITC) or Child Tax Credit cannot be issued before mid-February, according to the IRS.
“The law provides this additional time to help the IRS stop fraudulent refunds from being issued,” the agency stated.
If either of these tax credits applies to your return, you might not receive a refund within the 21-day deadline if you file as soon as possible on January 24.
The delay is related to a law that was passed in 2015 that slows refunds for people who claim these credits.
The law was passed to foil fraudsters who use identity theft to steal taxpayers’ refunds.
