Like many other Americans, Mia Dent is looking forward to her tax refund so she can catch up on bills. But it hasn’t arrived yet. She was too surprised to know that her third stimulus check had been transferred to the wrong bank account again.
The Columbus, Mississippi, resident, who earns $11 an hour as a Walmart personal shopper, has fallen behind on her car payments after reduced hours due to the coronavirus pandemic.
She modified her bank account details with the IRS for her 2019 returns the previous year, but she never got her second stimulus check, despite receiving the first.
“I was expecting a $200 refund and qualified for the $1,400 and $600 stimulus payments,” states Dent, 27, who was hoping for a $200 refund and was eligible for the $1,400 and $600 stimulus payments. “I’ll take any money I can get.”
The IRS is rushing to transfer out stimulus checks to millions of struggling Americans who have faced economic hardship due to the coronavirus pandemic, causing significant delays for almost 7 million tax filers who are awaiting their refunds this tax season.
The agency is dealing with staffing issues and outdated IT systems while implementing major tax code changes as part of the COVID-19 relief packages.
According to IRS data, approximately 6.7 million returns have yet to be processed. According to the report, this is more than three times the same period last year, when fewer than 2 million returns were delayed processing.
When USA TODAY contacted the IRS, it directed all inquiries to its website. According to the agency, the pandemic is still causing delays in services such as reviewing tax returns, processing paper returns, and responding to taxpayer mail.
Some early filers face postpones.
Different Americans who made certain to file electronically when tax season began on February 12 contacted USA TODAY this month, saying they were still waiting for the IRS to process their returns.
Like Dent, some of those who filed early wanted to update their bank account information with the IRS to receive the $1,400 stimulus payments.
Bonnie Wright, 32, expected her $8,830 refund to help her family’s finances after falling further into credit card debt.
She and her husband, both chefs, were forced to abandon their plans to open a restaurant last year when the pandemic struck and he was furloughed.
She completed their return in late January, and the IRS received it on February 12, she claims. The couple began a game of chicken, hoping to pay their $1,260 rent with this month’s refund.
However, it has yet to appear. So they put half of the rent payment on one credit card and applied for another to cover the rest.
Her husband works two part-time jobs to make ends meet: a UPS package sorter and an Amazon delivery motorist. She returned to the nursing academy and obtained a part-time job at Amazon as a storage picker.
“I’m counting on the refund. We’ve been using all of our credit cards to the limit. “Wright, who lives in Richmond, Virginia, with her husband and two children, says, “It’s difficult to know that we’re going to be in debt for a long time.”
IRS scuffles with new tax law modifications
Some tax professionals are concerned that millions of filers, particularly those who have already filed their returns, will face significant processing delays if they are required to file an amended return to take advantage of new unemployment and dependent child tax breaks included in the latest relief package passed last week.
Many taxpayers would not have to pay taxes on up to $10,200 in unemployment benefits received last year as part of the American Rescue Plan. For married couples, the exclusion is up to $10,200 in jobless benefits for each spouse.
In addition, the new legislation includes a one-time increase in the child tax credit for 2021. The credit is worth $2,000 for each child under the age of 17 who can be claimed as a dependent.
The bill would temporarily increase the credit to $3,000 per child, or $3,600 for children under six. For the first time, 17-year-old children would be eligible.
ACCORDING TO THE AGENCY, the IRS dives more than nine out of ten refunds in fewer than 21 days. The agency may state that a return will take longer to process if incomplete or incorrect.
According to the IRS, refund inquiries cannot be answered by toll-free or Taxpayer Assistance Center employees until 21 days after the tax return was electronically filed.
Wright says she called an IRS representative earlier this month after the 21-day period expired, and she was told to wait 10 weeks from the date her return was accepted for her refund.
IRS is yet sorting via some of last year’s returns
However, this is only the beginning of the IRS’s face this tax season.
Due to the pandemic, the federal income tax filing deadline was moved from April 15 to July 15, and the agency is still sorting through returns from last year.
According to Toby Mathis, a tax expert, partner, and attorney at Anderson Law Group in Las Vegas, Nevada, “the IRS hasn’t even opened paper returns from last summer.” “Last month, the IRS sent a notice that they were opening mail from June.”
As a result, Americans who filed in July may still be receiving incorrect correspondence from the IRS. “This means more work for everyone,” Mathis continued. “Clients are terrified. CPAs must make a phone call. The IRS must respond. It’s a complete disaster.”
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